Growing evidence that the downturn is upon us.... [Archive] - Page 3

A and C

9th May 2008, 08:55

I think that you may have the wrong person, it is Nick-Av (or what ever he calls himself this week) that is up for the Boom & Bull line.

My take on the whole thing is that the situation is far better than the worst doom & gloom forcasts on this thread, there is no doubt that things are slowing down and descretional spending is lower due to a number of factors that have been outlined above.

However things are not the same as in 80's, the world economy has moved on, the USA is not the only big player with the economys of the far east having far more influence along with the Euro zone (inside the Euro zone the price of oil is not such an issue due to the strong Euro vs US$).

As for the $200 barrel of oil don't you think that some traders are pushing this line because they did some panic buying a week or two back and would take a very hard hit if the price of oil dropped by even a few $ ?. Oil is like gold it is seen as a safe haven for money when things get tough and so the price rises and as the panic subsides the price drops back. (just the opposite of the UK house market!!)

However this is so much pilot opinion I,m flying with a guy from the city at the weekend and I will see if in his (more expert) opinion things are as bad as some on this forum would have us think.

JB007

9th May 2008, 09:55

Now I know they've had their problems over the years, but it's no coincidence that it's now they've gone.

Actually...it is!

This airline has been on it's way out for the past 12 months. I'm afraid an example of mis-management/poor planning and intense competition from someone as sound as JF/FlyBe. The EMX business plan didn't stand a chance since FlyBe's arrival - on an Island, airlinks are vital, especially to a principality...

I would not chalk this one down to a downturn in the economy/aviation industry...

Frankly Mr Shankly

9th May 2008, 10:29

I agree with you JB to an extent. The airline has been, well shall we say not the best managed over the last number of years, and the intense competition with an operator such as Flybe has invariably put the writing on the wall for some time. But then you add on the problems with the general economic downturn, fuel prices etc etc, and only in my humble opinion, they were contributory factors to the timing of it, and I dont believe that EMX will be unique this year.

The circumstances leading to their demise certainly had alot to do with the management of the airline, however even better managed airlines, particularly in the lo-co sector (but not exclusively) are finding it tough and I wouldnt be surprised to see at least one reasonably sized airline fall by the wayside by the years end.

Not being doom and gloom, I just think similar to the housing market, the UK airline market has seen a remarkable boom over the last few years, with what seems everyone jumping on the bandwagon to start a new airline or at least subsidiary, and personally I dont believe it (the market) can be sustained in these circumstances.

Parson

9th May 2008, 10:57

Ryanair, easyJet and flyBe are here to stay, but excluding the legacy and charter carriers how many more names will disappear over the next 12-18 months?

The likes of Air Southwest, BMI Baby, BMI Regional, Eastern, Jet2, Loganair (OK for the moment with flybe franchise) could find it tough - not going bust, but ripe for takeover. Lets hope they all make it through to 2009/2010.

Jodiekeyz

9th May 2008, 13:04

EasyJet shares plummet on profit warning

Airline shares fell sharply this morning after budget carrier easyJet warned that higher fuel prices will dent its profits this year.

EasyJet said that if oil prices stay at their current levels its fuel bill for the second half of the year will increase by £45m. "It is unlikely that such a large and immediate fuel increase could be mitigated in the short term by revenue improvements and cost actions, therefore pre-tax profits for the full year would be below previous guidance," the company said.

EasyJet shares plummeted more than 16% this morning and later traded down nearly 10%, or 35.75p, at 339.25p. Budget rival Ryanair dropped 5.64% while British Airways shares were down 3.15% at 223p.

UBS analyst Tim Marshall downgraded his forecast for this year by 25%, next year by 41% and the following year by 40%.

"First-half results will be in line with our expectations, however it is pretty obvious that if the recent significant rise in the fuel price is maintained then our second-half profits will be lower than we had previously expected," said easyJet chief executive Andy Harrison. "Of course the price of fuel will hit all airlines and we remain convinced ... that we shall emerge as winners in a high oil price environment."

Oil prices have surged to hit fresh record highs in recent months amid turmoil in world stock markets. The cost of crude breached $110 a barrel last week.

The forward price for jet fuel this summer has ballooned to $1,000 a tonne from $840 a tonne at the beginning of last month, easyJet said.

http://www.guardian.co.uk/business/2008/mar/19/easyjet.profitwarning

Wee Weasley Welshman

9th May 2008, 17:40

we are in a full speed housing crash. Today an Agent knocked 50k off the asking price of a house I viewed 6 months ago. He also indicates that offers would be welcome..

Falling house prices have always resulted in recessions in the UK. Recessions always lead to airlines going bust. Euromanx is but the canary in the coalmine... How many airlines go bust at the START of the summer season?

If you are a wanabee you need to protect yourself.

This is 1990.

WWW

Shiver me timbers!

9th May 2008, 17:48

Can't resist throwing this in.

http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article3900124.ece

:}

potkettleblack

9th May 2008, 18:46

Do a search on pilot jobs in India and you will find that they have closed the door now to expats so don't get your hopes up. Its a localised problem and not reflective of the state of play for wannabes in the UK or western Europe.

Incidentally those Euromanx guys and gals will now be taking those ATR and TP jobs that more than likely would have been filled by 250hr first timers with the likes of Air Southwest Aer Arann etc. If more airlines go bust then there will be lots of experienced pilots around scratching for work.

hollingworthp

9th May 2008, 19:35

A & C

I don't think Nich is on here now - his last account (Nich_Av or whatever) seems to have been deleted and I think his previous one was suspended.

I will miss him as he brings a certain entertainment factor to what is otherwise a very sober topic :)

A and C

10th May 2008, 18:03

The reason that the agent was so keen to knock £50 grand off the price was to get some money into his bank!

At the moment estate agents are dropping left right & centre. In the good times Any old lagg with a car, mobile phone and shop front can set up as an estate agent. These people pushed up the price of houses and are in part to blame for the high price of property.

Now comes the positive feedback they can't now sell at the inflated prices they could last year and need to sell at any price to get some money through the door.

The thing that I find most pleasing is that the good estate agents will be able to ride this out but the "wide boys" will go broke.

The bottom line is if you sell a house now you will buy another at an equily depressed price so no overall loss, if it is a roof over your head you are wanting the "value" of that roof is not much of an issue, however if you are one of the millons of Brits who see the house as some sort of investment and have borrowed far to much in the hope of making a quick buck then you are deep in the doo-doo.

Rugbyears

10th May 2008, 21:02

Astute financial planning is essential for those wannabes who are about to embark on such training - I agree, training in the current climate is NOT impossible, however, one would seriously suggest that individuals carefully account for All costs; for example, examine surplus costs closely; examination fees, living costs, not to mention fuel and travelling costs, they all add up to a rather large sum over 12 - 15 months.....!

The following is a brief article on the importance of Oil prices...:eek::{

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/06/bcnservice206.xml (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/06/bcnservice206.xml)

nich-av

11th May 2008, 00:22

Hollingworth, I welcome your enthusiasm.
I'm pretty busy now so I can't waist much time arguing with 15 year old would-be economists.

It's useless to analyse today's market conditions and to deduce that it's a bad time to start training. If all of you who are "trying to warn" would have done that 2 years ago I would be applauding you... I'm on the record on another forum for predicting a strong slowdown in 2008 back in February 2007, against reports that flight schools were fuller than ever, that the industry was flourishing and that it was the best time to start...

Oil prices are rising, alright, but ever considered why?
Let's look at who's feeding and winning from these "crude is gonna hit 200 by x-mas" rumours:

Exxon profits up 17 percent:
http://www.rockymountainnews.com/news/2008/may/01/exxon-mobil-q1-profit-up-17-percent/
Shell profits up 12 percent:
http://www.reuters.com/article/hotStocksNews/idUSWLB063520080429
and a funny quote:

It said production averaged 3.52 million barrels of oil equivalent per day (boepd) in the first three months of the year, compared with 3.51 million boepd in the same period last year.

Analysts had predicted output would fall to 3.40 million boepd

Rumours and false predictions by people who have influence... I've got my theories about this recession and the people who are feeding it.

Whatever this is all about, it is unimportant because people starting training today will be ready 2 years or later from now, and the recession and all associated rumours will be long gone by then. My prediction from what I know is that there will be a huge pilot shortage 2 to 5 years from now followed by another recession which will see many established European carriers go down. This is not an instinctive prediction unlike what we're used to read here and there, but the result of deep analysing.

As the young kids on this forum are very keen on bending and blowing my words and paragraphs, I'll be more precise regarding the content of the mentioned upcoming pilot shortage:

If there will be a pilot shortage, it doesn't mean that major carriers will beg 250 hour pilots to join them, far from that.
Instead it will be regional carriers, bizjet operators and other lower-paying operators who will have a hard time keeping their cockpit personnel.
First officers will "use" these operators to acquire the initial experience but better pay, better career prospects and better company stability will drive many of them towards a legacy carrier job after less than 2-3 years. Regional operators will have to raise the salary bar of captains beyond that of legacy carriers to keep their captains but also to convince some first officers to stay for an upgrade.

Farnborough will show us that the industry is hungry, very hungry. Expect several 100+ orders by Middle-East carriers, some strong orders from Asia and some surprising orders from Africa. Also, the recession is perfect timing for a huge order from Ryanair, O'Leary still has to make his promise of low-cost longhaul true and A350XWB slots are starting to fill while B787 slots are already full until at least 2017, assuming that Boeing can ramp-up production as expected and that it doesn't take longer. I assume O'Leary was waiting for the B787-1000 but that is not likely to come before 2018, if ever, so he'll have no choice but to order A350XWB or B777 if he wants to go longhaul before 2020.

One last point I'd like to mention. The B787 will start being delivered from 2010. That will bring an enormous amount of affordable used B767ER/A330's to the market, enabling many smaller carriers to grow, some others to start-up.

NO, commercial aviation will not go down in this rumour-fed recession and high oil price crisis. I do feel comfortable about that when I see oil-sheiks investing in aviation.

zapoi67

11th May 2008, 00:28

http://www.iata.org/pressroom/pr/2008-05-02-01.htm

The slowdown in the demand growth continues the sharp downward trend which began in December 2007 as the impact of the US credit crunch began to be felt in the airline industry.

So there is still a growth, or what ?? :ugh:

Jodiekeyz

11th May 2008, 11:04

The UK economy grew by 0.6% last quarter.

A bbc reporter, Robert P has normally a good grasp of things...Read his blog (http://www.bbc.co.uk/blogs/thereporters/robertpeston/)

Worst over - or not?

* Robert Peston
* 1 May 08, 07:20 AM

Fill your boots with sub-prime, asset-backed securities.

That's the implication of the Bank of England's latest Financial Stability Report.

Actually it would not put it as starkly as that, since the Bank of England is not - as far as I am aware - authorised by the FSA to give investment advice.

But the big message of its latest Financial Stability Report is that the cost and availability of credit, on the one hand, and the price of certain investments - such as securities linked to subprime - now exaggerate the risks in the global economy, where for years they were understating them.

Some will say that the Bank is stating the obvious. But as a public statement, this represents a significant change of emphasis. For years, the Bank argued the reverse, quite correctly - and more's the pity that it was systematically ignored by the City.

Subprime lending was, during the credit market euphoria of the previous few years, the extreme case of banks ignoring the golden rule that they should never lend without checking that the relevant borrowers can repay.

But what a difference nine months make: the pendulum has swung so far that financial institutions are currently assuming that losses on subprime will be on a scale without any precedent.

The Bank of England thinks their fears are exaggerated. It now believes that the market price of subprime investment products overstates likely future losses on subprime lending by about 100 per cent.

How so?

Well, because of the collapse of trading and liquidity in that market, prices imply that losses for providers of subprime loans will eventually be $400bn. But the Bank calculates that actual losses should turn out to be less than $200bn, when all the potential defaulters have handed back their keys and their respective properties have been seized and sold.

That means anyone prepared to buy subprime now and hold it to maturity would make a mint (more than $200bn if you were to buy the lot).

It also means that banks such as Royal Bank of Scotland which have been savagely marking their subprime exposure to the depressed market price may well be writing back those charges as handsome gains, in the coming years.

As you can imagine, I urged the Bank - on behalf of us poor taxpayers - to turn itself into a public-sector prop desk or hedge fund and go massively long of CDOs, ABSs and all the rest.

And if it succeeds in knocking 15 percentage points or so off the national debt from the future subprime gains, surely no one will begrudge me my 20%, hedge-fund style cut of the spoils for suggesting the big play.

No one could accuse the Bank of England of insider trading, since it has perhaps gone beyond the call of duty to create the conditions in which banks and financial traders see sense about the real risks out there - by launching its £50bn-plus scheme to allow banks to swap unfinanceable mortgages securities for the equivalent of cash.

Oddly, the Bank doesn't wish to put its analysis to sharp commercial use. As I said, the point of its subprime calculation is to persuade banks and other financial players that they are now too fearful of the risks of lending and investing, where before they were systematically ignoring those risks.

Or, again to stress the point, if all manner of loans were too cheap and easy to obtain prior to last August - and stoked up that financial bubble for which we're all now paying - credit is now disproportionately expensive and tight.

For the Bank, this is grounds for modest optimism, in the sense that it hopes banks and controllers of huge pools of liquidity (notably the massive US money managers such as Fidelity and Legg Mason) will gradually realise they are being neurotic about the outlook and will start to lend to our banks again at longer maturities than overnight and at reasonable prices.

But the Bank acknowledges that there is a substantial residual risk of lenders not seeing sense. In which case, lenders would bring about the very thing they fear most by continuing to restrict the availability of credit - viz the collapse of over-stretched borrowers and further falls in asset prices which would generate incremental, spectacular loan losses.

The kernel of all our problems remains what it was, a chronic shortage of liquidity in the banking system. And normal conditions should at some point return. But the Bank cannot predict when that will happen nor be confident there won't be another banking or markets accident in the meantime.

Which means that if you see the Governor propping up the bar in your local hostelry, it's probably not worth asking him for an investment tip.

student88

11th May 2008, 12:45

I'll never understand why people post comments like that - if you've got nothing constructive to say then why bother!? Save yourself the energy.

S88

Lafyar Cokov

11th May 2008, 13:24

Can I sum up this whole thread??

"There may or may not be further trouble ahead for the financial and housing markets - some people fervently think there will be, others are not convinced. Anyone who is thinking of entering training now should probably be quite careful that they can financially afford to do this and should think very carefully before committing themselves to a large bank loan. Wise planning and a bit of luck should land you in the right place at the right time however, be prepared for the job market to slow down and expect a possibly protracted period of unemployment prior to finally landing that first job once your training has been completed"

Can we close it now???

James D

11th May 2008, 13:43

Rex Banner & Plastic 787,

I don’t think it’s any coincidence that you two are slating this thread, given that from your previous posts it seems you’re both in the process of taking out huge loans for flight training.

Obviously no one can be sure how things will pan out but I think it’s abundantly clear to anyone with half a brain cell that now is certainly not the time to be going into an integrated course with a £50k debt.

If you're not interested don’t bother reading the thread, it’s only going to tell you exactly what you don’t want to hear.

Jodiekeyz

11th May 2008, 13:44

Laf nice summary. Plastic and others, clearly this thread is upsetting you so why don't you stop reading it :confused:

Plastic i see the reason now why you are getting upset by reading some of your other posts. Dude IN MY OPINION this is the wrong time to be taking out such a massive loan.

Jodiekeyz

11th May 2008, 14:00

I see plastic but seriously just stop reading this thread. You do what you feel is right. I agree with your last comment but it's all about risk management, get it wrong and the conseqences can be very bad. Good luck :ok:

Rugbyears

11th May 2008, 15:50

Is it not the purpose of this thread is to engage in a healthy debate, arguing the finer points of individual thought and opinion as to current financial influences in our industry? If you do not agree with a particular post or way of thinking, then it is up to you to structure a valid argument, clearly stating the reason why you disagree with a particular opinion.

Please, if you find this topic both boring as well as biased, then I foresee two options for you. First option, articulate your opinion - Second option, simply do not frequent this thread.

Adios

11th May 2008, 15:58

I found this thread boring and haven't checked it for weeks. Now that it has turned to arguments about whether or not it should even be here, it has slipped from merely boring to overwhelmingly tedious. Reaching for the face curtain now...

student88

11th May 2008, 16:09

Plastic787, no need to feel sorry for me. I have the patience of a saint.

If you can't stand the heat, get out of the kitchen. And please, don't think that I'm telling you what to do. All I can say is listening to people state random facts like "This is fast becoming by far the most boring (not to mentioned biased either way) and therefore unreadable thread on pprune." is dull and unnecessary. I don't think that the most subscribed to thread in the Wannabes PPT Forum can be considered boring. Hopefully many others will agree with me when I say you clearly have nothing to offer this thread. Why bother to continue adding to it?

Good luck with your training. I'm sure you'll do great.

S88

Dane-Ger

11th May 2008, 16:42

I think the thread serves it's purpose well. It will not stop those who are determined to start training (nor should it in my opinion) but many, including myself will take the advice seriously.

I, for example, have changed my plans slightly, involving taking an FI rating directly after my CPL and waiting with my IR, that way if it all goes belly up, I can continue my current job and instruct part time until the worst blows over.

I was never going to, at the age of 33, blow 50K on an integrated course. so modular or integrated was never an issue for me but I can see the logic in starting ground school via DL and continuing working and saving, rather than going into serious debt with an integrated. I think this is the most pertinent point that had been raised by WWW and others.

It don't think it's a a case of people foretelling the future, rather of people in the industry advising wannabes to tread with caution just now, and maybe adjust their training plans accordingly.

Regards D-G

Adios

11th May 2008, 17:57

Who will you instruct if this thread serves it's purpose?

john.o.pilot

11th May 2008, 18:19

This is a good thread. It is always good to discuss future with other people before you commit to spending £60k on integrated versus £35k on modular training.
Employees in some flight schools read these threads a lot during their non-flying time and always try to belittle anyone who says anything other than "Its never been a better time to become a professional pilot. :cool: Market is buoyant and is predicted to stay strong for next ten years." :ok:
I have six mates who completed pilot training. One is flying for FlyBe and was happy to accept £30k paycut (he was IT manager before in one of the UK airlines).

One paid for Ryanair scheme and is close to becoming FO. Four others are shop assistants and have been for last few years despite the buoyant market.
Point of the story. It is a gamble so make sure you have backup profession.

nich-av

11th May 2008, 18:30

Who will you instruct if this thread serves it's purpose?

Funny comment Adios :ok:

I have my concerns about the decreasing number of youngsters engaging into a cockpit career. Look at flight schools today, you rarely see 18-22 year old students... most are over 25. The interest is clearly not there anymore.

This in an industry growing at 5% per year... (well a bit less these few months). Luckily, industry consolidation has limited the impact of pilot shortage until now and a few years to come.

But should we be concerned?
I'm sure that once we' re in the middle of the upcoming pilot shortage, and that all the media starts talking about it, people will queue up at flight schools to start training...by the time these people get their CPL IR ME, the next round of recessions will hit, leading to overcapacity.

Saturation stimulates shortage, which in turn stimulates saturation.

This thread is interesting to have an idea where the actual industry stands for people who already have their CPL IR ME, but gives no clue as to whether people starting now will find a job easily 2 years from now.

Taking huge loans to pay expensive schools while some schools give you the possibility to get the same for half the price? Recession or not, it's mad... but the people making such decisions have their reasons, and it's not a single thread on a single website that will change people's mind.

You got to love FTO marketing:
I just read somewhere: "98% of our school's commercial pilot program graduates have found an airline job". :ugh::ugh:

Can you find the irony in this advertisement?

Employees in some flight schools read these threads a lot during their non-flying time and always try to belittle anyone who says anyhting other than "Its never been a better time to become a professional pilot.

Nah, it's easy to generalise... but it's commonly true that flight schools would advertise pilot shortages at any time. On the other hand you have to admit that it's almost impossible for someone holding a CPL IR ME at a reasonable age to not find a job within a timeframe of 5 years from graduation. (so answering the irony question of the last paragraph)
There will commonly be a pilot shortage in any 5 year timeframe. the question is only: how long will it take for a graduate to find a job? It can not be predicted accurately by anyone, unfortunately: starting in the middle of a pilot shortage does not necessarily mean that one would graduate in the middle of it, since training lasts 2 years on average...

Best solution?
Find a job and go modular with a local FTO. After graduation keep the job while sending applications and hour builing/instructing.

Starting today or starting tomorrow, next week or in 5 years, is not going to change you odds by much anyway. The sooner you start, the sooner you'll find a RHS job.

Dane-Ger

11th May 2008, 19:11

like I said, I doubt anyone will stop training because of a thread on pprune. But if there are not even part time instructor jobs I will continue my present job without the need for an expensive IR renewal and I'll be ready when the worst is by.

Personally I don't think it will be as bad as some think. but who knows, which is why I am being just slightly more cautious than I was just a few months back!

acuba 290

11th May 2008, 20:29

looks like "Rugbyears (http://www.pprune.org/forums/member.php?u=232978)" was the person, who wrote all the questions @Human Performance and Limitations ;) :)

Rugbyears

11th May 2008, 22:00

acuba 290 - I only wish.....!!!! I struggle to compose the simplest of posts, it's a wonder I'm able to read and write, let a lone fly an aircraft!:eek::E

To get back on topic….

Of late, several parts of the country have witnessed a steady reduction in house prices, although, many would argue this as catastrophic; I am somewhat of the opposite view. Of course, there will be those who find themselves with negative equity in a property, not nice. Despite this, we as a nation have encouraged heavily inflated housing prices to such an extent, very few first time buyers are in a stable financial position to purchase a first time property. Surely in such a climate it is impossible to sustain financial stability. However unpleasant this process may appear in the short term, over a longer duration of time, how can this process be considered a bad thing.

Wee Weasley Welshman

13th May 2008, 15:44

A very evidential day today unfortunately.

If you accept the historical pattern that a house price crash leads to a recession which in turn sees airline failures which results in a Wannabe disaster, then, todays news is grave.

You have the Royal Institute of Chatered Surveyors reporting the worst figures since 1978 of members reporting falls. For the first time these were nationwide including Scotland. Then the housing Minister Caroline Flint leaks the Governments view that prices will be AT LEAST 5% - 10% by the end of the year and they don't know how bad it will get.

Redrow the builders are laying off 15% of their staff as sales plummet by at least 20%. Inflation has broached 3% on the CPI measure. Sterling slides against the Dollar and Euro.

It is absolutely crystal clear that a house price crash is occurring NOW. Combine soaring inflation with increasing ticket prices due to oil and it is obvious that the consumer will not be buying as many tickets, holidays or goods in 2008/9.

Be VERY VERY careful about handing over any kind of advance payment for any training in the coming months. I fully expect some training organisations to go bust in the storms ahead. It happens every time and every time there is always one chump who handed over a big cheque the week before.

Don't be that chump,

WWW

nich-av

13th May 2008, 17:08

Oil prices are forcing flight schools to charge more for training.

I think that actual oil prices are unsustainable and that prices will fall sharply starting from end of the year, begin next year.
But oil prices at 200$ are beyond fantasy because demand would decrease significantly beyond 150$. Yes, countries like China and India and their booming economies enhance demand, but these countries can't pay crude at 150$ and the equivalent price in their currency, so demand in these regions will decrease.

At 150$ U.S. airlines would have to ground most of their aircraft waiting for oil prices to drop, and wait for Uncle Sam to print more money.

I don't think 150$ per barrel wil be reached unless someone starts propagating rumours that crude can be as good as olive oil to dress the salad.

A good read for wannabe economists:

http://www.wtrg.com/prices.htm

smith

13th May 2008, 17:09

There are a couple of big birds in the circuit at PIK today, a Jet 2 737 and an A320 (don't know who's). At least thats a plus:)

potkettleblack

13th May 2008, 17:30

WWW raises a very good point about paying in advance. It should be common sense but unfortunately far to many chase the allusive 5% discount and hand over wedges of cash and see their dreams go up in smoke.

I started out on my PPL way back in 2000 so have probably seen more cycles in this industry than most wannabes. Search on schools like PPSC and SFT if you don't believe that it can happen. Both were big schools that everyone thought were untouchable. I remember buying some old ATPL manuals cheap off a guy that had lost it all and his dream along with it. He ran out of cash and called it a day. Its real and it happens and it will happen again. The sad truth is that the same operators will take their crusty old Seneca and 152 and set up the following month under a new name and the phoenix will rise again. There are far to many schools as it is offering an inferior product and a shortage of cash coming into the industry will make it harder for them to survive.

kj990

13th May 2008, 19:10

This really is the late 80's all over again sadly. Ignore the quality broadsheets at your peril.

It might be 'different this time', I doubt it myself.

Trapattoni

13th May 2008, 19:47

I have actually worked in Markets with Stocks and shares for sometime - Specific qualifications to go with it.

I wont go into my own "opinions" on whats going on at the moment but I have to say just reading the vast majority of this thread has me thinking even harder about my decision.

I had almost made my mind up to go o either Waterford Pilot training in SE Ireland or Jerez in Spain..paying the full whack of approx 100k (living exp etc) but now I read the pessimism on here and think to myself that if I was to start the course later in the year I would wind up stuck with no job, no experience and no more money!!

what some of the more experienced guys think??

Cheers

john.o.pilot

13th May 2008, 21:04

if you have lots of savings go for it integrated route (somewhere like OAT as you will have better job prospects at the end). I don't know much about OAT but out of all of my pilot friends (6 of them), only one who trained at OAT got job in airline.
If you are just average earner like most of us than do modular route and definitely keep your current job. Working as stock market analyst, you will always be able to afford flying. :ok:

Trapattoni

13th May 2008, 21:56

Its not about the money at all John, You could pay me 200k a year and I still wouldnt want to keep on going with it...

By the way why would i go to OAT if you say none of your friends got jobs with airlines coming from there?

DOing it while I work is not an option either - I am either going for it or holding back you know?

Tootles the Taxi

14th May 2008, 01:45

By the way why would i go to OAT if you say none of your friends got jobs with airlines coming from there?

I was a bit confused by this; I think he means that only the friend who trained at Oxford got a job, meaning the other five trained elsewhere?

I'm not convinced though that this is useful advice - searching this forum will prove fruitful. Remember, success is more often down to the individual than the company they train with. As said previously, proportionally more graduates from OAA have found (bought) their first job with Ryanair in recent months. This says more about the size of their wallet than the help they got from the training provider.

A and C

14th May 2008, 06:37

Could not agree more !

Don't these people know that there is nothing more the press like than bad news? writing a story that you can worry people, use a lot of hype and get the paper sold due to the disaster headline has always been the easy way for the hack to go. Balance in fleet street? unlikely I think.

After pages of this hyped gloom & doom I,m off to the "dress code" thread for a bit of fun.

Wee Weasley Welshman

14th May 2008, 08:31

I agree that bad news sells. However, those that utter the phrase "talking ourselves into recession" or who blame collapsing house price bubbles on "media doom mongering" are merely in denial. Denial is a phase of the process. Fear, Capitulation and finally Despair are the next phases.

You can't deny the M4 or M3 money data, the inflation figures, the rising insolvency, the price to earnings ratios, the credit supply contraction nor can you deny the crash that is happening in similar economies. You can ignore the lessons of economic history but you cannot deny them either.

Every house price bubble since the late 1950's has burst, leading to recession and recessions are murder on airlines who always seems to operate right up to the very edge of the economies capacity. Combine a recession (even a mild one) with an oil price shock (even a mild one) and you have a uniquely horrid situation for airlines.

This is emphatically not the case for airlines in any of the BRIC countries who are going flat out for airline expansion. Ditto the Middle East. All good news for experienced pilots who find themselves on the jobs market unexpectedly - plenty of contracting work out there in the wider world.

For a Wannabe and in particular a UK Wannabe the picture is far more bleak.

Consider a tiny shard of the bigger picture in the form of the CTC cadets. One of the the very largest taker of these cadets from the Wings scheme was easyJet. Who are now overcrewed and looking to reduce pilot numbers. Many other airlines who have taken CTC cadets are in a similar position, Thomas Cook and Thomson spring to mind. The cadets coming out of the system in the coming months are going to need jobs and I can't see there being enough.

These carefully selected, groomed and marketed by CTC Wannabe airline pilots will be in the same pile of CV's that yours will be.

Don't abandon your dreams. But DO protect yourself and your family by avoiding taking on risky debt based on an assumption of getting a job swiftly.

Keep your debt low. Taking this decision informs you of the most appropriate training decisions.

WWW

ps As an aside here are the current debt stats for the UK as of 1st May 2008 courtesy of http://www.creditaction.org.uk Its scary stuff and it CANNOT continue to grow at this rate..

Total UK personal debt at the end of March 2008 stood at £1,430bn. The growth rate increased to 8.7% for the previous 12 months which equates to an increase of ~ £113bn.

Total secured lending on homes at the end of March 2008 stood at £1,200bn. This has increased 9.1% in the last 12 months.

Total consumer credit lending to individuals in March 2008 was £230bn. This has increased 6.7% in the last 12 months.

Total lending in March 2008 grew by £8.2bn. Secured lending grew by £6.9bn in the month. Consumer credit lending grew by £1.2bn.

Average household debt in the UK is ~ £9,216 (excluding mortgages). This figure increases to £21,433 if the average is based on the number of households who actually have some form of unsecured loan.

Average household debt in the UK is ~ £57,420 (including mortgages).

Average owed by every UK adult is ~ £30,120 (including mortgages).

Average outstanding mortgage for the 11.8m households who currently have mortgages now stands at ~ £101,530.

Two fifths of mortgagors have secured debts of over £90,000, up from one fifth in 2004.

Britain's interest repayments have soared to £93.8bn in the last 12months. The average interest paid by each household on their total debt is approximately £3,765 each year which has increased £340 in the last 12 months.

Jonty

14th May 2008, 08:57

Thomas Cook are taking a load of ctc cadets this year, along with some alteon cadets. And are, so far, under crewed for 2008. I did not think that Tui ever took CTC cadets.

While I don't think that WWW is right about a recession and his argument has been nauseatingly repetitive for the last eight years!! The best bit he ever typed was contained in that last post. Don't abandon your dreams, but protect yourself by not taking on large amounts of debt you cannot afford.

And that advice is just as relevant when times are good as it is now.

Re-Heat

14th May 2008, 09:13

I'm getting upset because certain people in here are so arrogant that they seem to think they are financial experts and they can predict the stock market. If they were that good why didnt they predict the subprime crisis in the first place and become multi-millionaires?
I never said I wasn't John Paulson...

Regardless, Anthony Bolton says in the papers today that share prices have a long way to fall, with recent rises simply being mid-downturn upticks.

The City is shedding 300 jobs per day at the moment, which translates to lower spending on business flights, and personal consumption cut back. Bear in mind that many of those will simply tighten their belts, live on savings, go to Business school, or move abroad for work - they will not show up in unemployment figures very easily, but their effect on the economy will be marked.

Clearly WWW reads his Lex column as well:

Economic data take toll on the pound
By Peter Garnham

Published: May 13 2008 11:14 | Last updated: May 13 2008 21:21

A toxic mix of data showing slowing UK economic activity and rising prices sent the pound downwards towards a three-month low against the dollar on Tuesdayy.

A survey from the British Retail Consortium showed UK sales registered a 1.5 per cent annual decline in April, the first time spending has dropped in two consecutive months since 2005.

The pound staged a brief rally, however, rising to a session high of $1.9594 against the dollar after figures showed UK consumer price inflation rose by far more than expected in April.

The annual rate of UK CPI increased from 2.5 per cent in March to 3 per cent in April, way ahead of the Bank of England’s 2 per cent target and a consensus forecast for a 2.6 per cent rise.

The pound spiked higher as traders reasoned that surging inflation would reduce the likelihood that the Bank of England’s monetary committee would cut rates by a further 25 basis points to 4.75 per cent at its policy meeting next month.

However, the pound’s rally ran out of steam as investors reflected on the increasing evidence that the UK was facing an economic slowdown. “Price action in sterling indicates that the market has placed more emphasis on slowdown in growth versus higher inflation,” said Kamal Sharma, of JPMorgan.

Late in New York, the pound was down 0.6 per cent to $1.9460 against the dollar and had lost 0.2 per cent to £0.7952 against the euro.

Wee Weasley Welshman

14th May 2008, 09:16

Sorry, I meant First Choice and Thomson. I get so confused with all the re-branding and merging.

Jonty - do I really need to trawl through and paste links to all the posts over the last 4 years where I have said that we are in a boom, that there has never been a better time to be a wannabe and that jobs are coming thick and fast?

I was very bearish on Wannabe prospects from Sept12th 2001 for two years and I was right. By 2005 I was very bullish on prospects as airlines were falling over themselves to recruit people and had difficulty keeping hold of cadets in some cases as they were poached by BA within months - I flew with plenty. In 2007 I became bearish on the economy and with it Wannabe prospects. Now in 2008 I am a great big grisly and believe I have the data and the evidence of my own eyes to support that position.

Claiming I've been a monotonous 8 year bear is just false.

:)

WWW

mustflywillfly

14th May 2008, 09:18

CTC have supplied cadets to Thomas Cook, Thomson Fly, BA, EJ, Jet 2 et al, now they are starting to supply to Ryanair, FlyBe, a Vietnam Operator et al.

WWW is right about the EJ position with CTC at the mo, hence CTC cadets will have to go elsewhere. Or swim in the hold pool for a while before somebody takes them on. Of course not many CTC Cadets want to go to FlyBe as the wages are low in comparison to the dosh they have forked out for the training. Imagine paying back your bond on already relatively low wages, I think it works out more financially viable to be an FI !

The bottom line is that the Integrated studes will still be popping out of the FTO machines and will be competing for jobs against the rest of us. Fortunately most of the 19-23 year old integrated studes I have met are wet saps with zero life experience and no personable qualities, most come across as "drones" who may be up to the job as FO on the FD but wouldn't really add any other value to an airline. Anyway that's just my limited experience and two pence worth.

Keep a plan B and box clever.

MFWF

Wee Weasley Welshman

14th May 2008, 09:25

I can see BA taking a few and Flybe. Jonty says TC are undercrewed. Other than that I can't really see any other airlines expanding that would normally take the CTC product. How many are in the pipeline on their way to the pool?

I must say I disagree with your view on CTC cadets. I have spent thousands of hours flying with dozens and dozens of them. Most are very able well rounded young people and many are of a rarely high calibre. There is the odd immature numpty. As a whole I have been mightily impressed by the CTC cadets and I am not alone.

WWW

Re-Heat

14th May 2008, 09:38

City view:

Deutsche (9th May) - Until airlines take the downturn seriously – by rising prices and cutting costs – the sector is likely to continue to trade well below book value. In our last sector report we outlined why this downturn might hit smaller airlines harder than bigger ones, as in our view it threatens the viability of the smaller players. We still have this view but also are now concerned by a weak response from the larger airlines to this input cost downturn of unquantifiable duration and severity. In particular the LCCs are now destroying value by growing in this environment...In our view only Lufthansa (our top pick) and Iberia are making clear efforts to address cost base and network position. We downgrade easyJet to hold and Ryanair to
sell until both cut back on growth plans. Its capacity growth is limited so we maintain a buy on BA but execution risks on its business repositioning remain high. Key sector risks include: fuel, a material macroeconomic downturn, and the risk of strikes.

Citi (1st May) - Condor / Air Berlin — The market has demonstrated concern over potential solvency issues relating to Air Berlin.

mustflywillfly

14th May 2008, 09:42

WWW, fair one about CTC cadets most of those that I have met are pretty good, If I'm honest I was having a rant about most of the OAT/OAA/Cabair grads that I have met. Nuff said about all that anyway, I wouldn't wish to have a thread drift regarding the suitability or otherwise of Integrated studes.

Best buddy has just been taken on by BA straight out of CTC but I think he is very much in a minority and I beleive came out top of his course (or so I am led to believe ;)).

No ideas on numbers but those Airline sponges are deffo drying up and will continue to do so (IMHO). CTC are expanding. All down to supply and demand again. Inevitable that growing numbers will enter the dreaded hold pool.

MFWF

Wee Weasley Welshman

14th May 2008, 09:49

I'd heard that the CTC pool is now 7 months deep but that comes very much from a swimmer rather than a life guard.

Thing is, I think the pipeline is at full pressure and will be emptying into the pool all summer long. If there isn't a normal airline recruitment and training bulge come the Autumn then people are going to start drowning.

WWW

veetwo

14th May 2008, 13:37

I'd heard from several sources inside the airline that easyjet were taking 16 CTC cadets on to the 320 LGW fleet at the end of May. I don't know if thats the case still or not, since plans seem to be evolving almost daily in response to the price of oil.

Interesting what WWW mentions about reducing pilot numbers at EZY. I can't see people being made redundant personally, not with the number of new aircraft coming in to the fleet. AH does allude to the possibility or rather probability that recruitment is going to stop to try to control crew numbers. Even then, surely SOME recruitment will still be required this year, just on a far smaller scale?

V2

Re-Heat

14th May 2008, 15:18

With apologies to the FT again - just published:

EADS and Boeing

Published: May 14 2008 09:42 | Last updated: May 14 2008 15:11

At the end of a night of partying, only your real friends are still there when the bill arrives. EADS is currently popular. In its first quarter results on Wednesday, order levels at Airbus were again phenomenal. Almost 400 planes have been ordered in the first four months, continuing the record demand for aircraft seen in 2007. Together with Boeing, the plane manufactures have a order backlog equivalent to almost eight year’s worth of production.

Unfortunately, the airlines are flaky customers. Order backlogs always build up towards the end of a boom when cash is flowing. Then orders tail off, and deferrals start as airline profits suffer. There is a lag, as once work has begun on a plane, and the pre-delivery deposit paid, it makes little sense to cancel an order. But aircraft deliveries start to fall 18 months to two years after a downturn begins – typically dropping by at least 40 per cent from peak to trough.

The broader spread of customers this time offers some hope that the magnitude of any downturn will be more moderate. Asia and the Middle East account for only a quarter of the existing fleet, but around 40 per cent of orders. Low-cost start ups in the Indian market look vulnerable, but well capitalised and state backed carriers in China and the Gulf should not struggle.

Yet annual passenger growth has only been negative twice in the history of aviation – after the first Gulf war, and post September 11 2001. This has not prevented violent swings in airline profitability, or aircraft manufacturer volumes. The International Air Transport Association predicts that the airline industry will produce earnings of $4.5bn this year, but based upon an oil price of $86 per barrel – or a total fuel bill of $156bn. With crude at $126, ticket prices have to go up. If this happens at the same time as capacity is rising and global economic growth slows, more airline failures seem inevitable. The enthusiastic clamour for planes seems unlikely to last.

nich-av

14th May 2008, 16:35

The most ridiculous article I have ever read.
I'd love to know the source of the article.

But aircraft deliveries start to fall 18 months to two years after a downturn begins – typically dropping by at least 40 per cent from peak to trough.

What a huge amount of speculation...
An amateur analyst who gives no evidence to back his claims. Are the media allowed to post such non-sense?

Here's the evidence that it's a huge lie: http://www.airbus.com/en/corporate/orders_and_deliveries/

Click O&D 1974-2007 and you'll see real facts about Airbus.

Is there a drop of deliveries 2 years after 2001? NO.

Also, I think that before posting such articles, the posters on this forum should check the facts. By fueling such articles you are giving the media a chance to forward false rumours.
One single media journalist claims that his predictions are better than airline fleet analysts at airlines worldwide who have orders for more than 12000 commercial aircraft to be delivered in the next decade.

Absolute non-sense.

JB007

14th May 2008, 20:15

Not sure TCA's shortfall of crew will be covered by a "gaggle" of CTC cadets but recruitment may be asking for type rated guys/gals again - which they will get...

People will always leave easyJet...

Don't expect TUI UK to recruit for the next few years...

As I said before, I would expect next "boom" to be 2010 more likely 2011 when certain airlines begin receiving B787's (hopefully!):rolleyes:

nich-av

14th May 2008, 20:51

As I said before, I would expect next "boom" to be 2010 more likely 2011 when certain airlines begin receiving B787's (hopefully!):rolleyes:

That is indeed what I expect as well.
Can't say for sure beyond that due to lack of data, but I suppose the A350XWB deliveries hopefully starting in 2013, the C-series and the MRJ entering service would do no bad to the industry.

I think that though all these new jets are coming to replace previous generation aircraft like the B744, B767, B757, A340, A330, Avro RJ, ERJ, etc... these aircraft will not end-up in the desert immediately but be picked up by freighters, 3rd world airlines and airlines in need of immediate growth... overall it should result in a capacity increase rather than direct replacement.

Wee Weasley Welshman

15th May 2008, 00:00

People will always join easyJet as well... Whatever that means.

Difficult to know where to start with todays news. It really couldn't be spelled out more clearly for Wannabes. Its not just me and some crank internet sources. This is the chief economic editor of The Times, the Governor of the Bank of England and the BBC all saying "Crisis", "Recession" and "Housing Crash".

I'll admit that this is happening faster than I expected. I shudder to think what 2008 is going to look like as the secondary effects kick in. Hyperinflation, Depression or Stagflation - I can see an argument for each or none.

There is certainly the risk of a very big mess developing for Wannabes.

Whatever your exact circumstance I would suggest that there is absolutely NO pressure now to crack on with your training in any degree of haste. If a more leisurely option is also cheaper then so much the better.

WWW

Links:

http://tinyurl.com/6ggekw Daily Telegraph

Recession danger is real, warns Mervyn King

The British economy faces the real risk of falling into recession, the Governor of the Bank of England has admitted.

Mervyn King warned families to brace themselves for a further "squeeze" on household finances as rising energy bills and food prices continue to rise.

The Governor - who said that "the nice decade is behind us" - also warned homeowners that property prices would fall further and that it was impossible to predict the scale of the decline.

http://tinyurl.com/5o676o The Times, Anatole Kaletsky

..literally unprecedented in the history of modern British government, sets the stage for economic and political disaster.

http://tinyurl.com/6fgm67 The BBC

Britons on the Costa del Sol are suffering a measure of the pain which the end of the housing boom is causing across the wider Spanish economy.
Estate agents report that house prices have fallen 30% in many areas; economic growth forecasts have been revised downwards.

Unemployment is rising and predicted to reach at least 10% by the end of the year.

hollingworthp

15th May 2008, 04:22

Depression or Stagflation Brilliant phrase - sounds like something that happens to a groom before his wedding :ok:

A and C

15th May 2008, 07:10

You realy are over egging the pudding, I to listened to the Governer of the Bank of England and the message that I got was not the Hyper Mega gloom & doom that your post insists is going to happen.

The guy warned of lower house pices (hooray ! at last people can afford to buy a house and not have to starve to afford it!) rising inflation and a pressure to keep wages down.

It was his opinion that growth would slow but the UK would NOT go into recession.

I think it is time for you to turn on the ears and listen to the whole story, yes things are going to get a bit tough on the economic front but it will not be so bad that you have to start inventing new words for it!

nich-av

15th May 2008, 07:29

A ABN AMRO bank analyst said that oil would rise to 300$ soon.

I sincerely hope it does, there are enough technologies out there to create cleaner energy at lower price. Finally some money could be invested into research and hopefully researchers could master the nuclear fusion concept. Nuclear fusion could power jet engines safely and cleanly...the only issue is power containment.
Since fuel will no longer be needed , the aircraft could trade the fuel mass for a containment system of similar mass.
Imagine that one cup of fusion fuel could generate enough energy to keep a jumbo jet flying years without landing.

A nice article for those interested: http://www.newscientist.com/channel/fundamentals/dn8827.html

That's what the $13 billion ITER project (http://www.iter.org/) is all about: By 2016, a huge magnetic containment vessel (also known as a tokamak) is to be built at a facility in France. Researchers will use that tokamak to test their concepts for sustaining a fusion reaction.
ITER's schedule calls for 20 years of research operations - leading to the construction of a prototype for a commercial fusion reactor (http://www.iter.org/Future-beyond.htm), known as DEMO, and then actual commercialization.

Kulcinski is worried about the latter stages of the plan. Once ITER and its follow-up projects demonstrate that fusion power can be sustained and controlled inside a magnetic vessel, it's up to the parties in the project - the United States as well as China, Europe, India, Japan, Russia and South Korea - to figure out how best to get the power out.
"First you do the physics," Ned Sauthoff, the head of the U.S. ITER program, told me back in March (http://cosmiclog.msnbc.msn.com/archive/2008/04/02/851992.aspx).
"You get yourself a burning plasma. Once you've gotten a burning plasma, then it's a matter for the politicians to decide, do they want to invest in the technology?"

If oil goes to 300$, they will have no other choice.

Jonty

15th May 2008, 08:19

Not sure TCA's shortfall of crew will be covered by a "gaggle" of CTC cadets but recruitment may be asking for type rated guys/gals again - which they will get...

People will always leave easyJet...

I'm not sure they will get them, Its going to be at least 10 years to command for anyone joining now, the pension is rubbish at best for new comers, and the level of concessions available is dropping. In fact, if I was at easy, I wouldn't leave for a job with TC. The package on offer is dire! And unless you joined before 2006 (final salary pension, and decent concessions) there is very little keeping you at TC for the ten years its going to take to get you into the LHS.

Anyway, back to the thread in hand.....

WWW, Your a big grizzly and you know it!!! ;)

Wee Weasley Welshman

15th May 2008, 08:50

A and C - when Central Bankers speak you have to interpret what they say. There is a whole industry of people out there who speak Central Banker. The general principle is that they try to make any statement as bland, as innocuous and as boring as possible. Coded phrases are used and certain words are carefully avoided. For Merv to use "the R threat is real" phrase and to say what he did in the way he did was explosive stuff for a Central Banker. I like the fellow and think he's doing a great job.

When the Governor of the BoE is saying he thinks a Recession will be avoided then in Central Banking terms he may as well have been standing on a platform with klaxons blaring, red lights flashing and a tin helmet strapped to his head.

I didn't make Stagflation up. See the wiki reference: http://en.wikipedia.org/wiki/Stagflation

Stagflation is a macroeconomics term used to describe a period of inflation combined with stagnation (that is, slow economic growth and rising unemployment), generally including recession.[1] The portmanteau term "stagflation" is generally attributed to United Kingdom Conservative MP and later Chancellor of the Exchequer Iain Macleod, who coined the term in a speech to Parliament in 1965

The article goes on to illustrate exactly where we are now. Stagflation leading to recession. I think that eventually we will see deflation as the house price asset bubble subsides by a nominal value of 20% and in real terms by about 40%.

The inflation Genie is out of the bottle around the world and the only painful cure is a deep recessionary period and unemployment. Here's a list - this is already resulting in food riots and if it continues could result in widespread civil unrest. Many of these countries are oil exporters..

Venezuela (22pc), Vietnam (21pc), Latvia (18pc), Qatar (17pc), Pakistan (17pc), Egypt (16pc) Bulgaria (15pc), The Emirates (11pc), Estonia (11pc), Turkey (9.7), Indonesia (9pc) Saudi Arabia (9.6pc), Argentina (8.9pc), Romania (8.6pc), China (8.5pc), Philippines (8.3pc), India (7.6pc).

WWW

RVR800

15th May 2008, 09:07

Zimbabwe 10000000%

Re-Heat

15th May 2008, 09:19

It was his opinion that growth would slow but the UK would NOT go into recession
That was the consensus in the US in October, and look where we are now...

A and C

15th May 2008, 09:47

I will conceede that some statments require "interpritation" i think that I once wrote in a Tech log "valve percussed" ops normal!

Wee Weasley Welshman

16th May 2008, 13:21

http://news.bbc.co.uk/1/hi/business/7404085.stm

BA sees profit soar by 45%. So its not ALL doom and gloom. :-)

WWW

neilcharlton

16th May 2008, 13:38

i imagine the T5 write downs will not be included !

Wee Weasley Welshman

17th May 2008, 09:31

The news rolls in relentlessly.

http://tinyurl.com/4yyass

From todays Times:

BA forced to consider £900m fall in profit

BA's profits are expected to collapse in the coming months as the sustained high price of oil pushes up its costs... This pessimistic outlook stunned investors who said it demonstrated how serious the coming downturn could be... “They are effectively admitting that profits could be zero in the worst-case scenario. There is clearly a lot of bad news to come.”... Mr Walsh told The Times: “Oil costs are going to change the industry, there is not doubt about it. A lot of airlines are going to struggle and some may be unable to cope. We have already seen failures and I think we are going to see more.”

The boss of Ryanair, easyJet and BA are now ON RECORD saying airlines are going to go bust soon. I don't know what clearer signal Wannabes could hope to receive.

There will be NO JOBS soon. Plan and spend accordingly.

WWW

leeds 65

17th May 2008, 10:19

People are really going over the top here and losing the run of themselves.Certain airlines will be worse off than others so to say something like 'there will be no jobs' is pure crap.

If recession does kick in to the effect which some people think it will then what will happen?Well firstly demand for oil will fall hence the price will stay static or fall slightly.Secondly people trade down when times are tuff,people will fly low cost such as ryanair,easy etc.Thirdly with a clear out of struggling companies that means less competition and possibly higher load factors for the stronger companies.Finally the companies with really strong balance sheets will prevail.Why?Well boeing and airbus will be forced to slash there prices if demand falls hence strong companies can get there hands on planes for cheap and in bulk hence more pilots needed.

Low cost carriers with strong balance sheets will need pilots,more expensive 'exclusive' airlines may tighten the belt and hold out on recruitment.

Thats my 2 cent worth,in my view no need for a major panic amongst people starting to train.:ok:

Wee Weasley Welshman

17th May 2008, 10:51

As a 20yr old Wannabe you frankly know Jack about this industry and your naive misplaced optimism is symptomatic of the massive complacency that is riven within Wannabeism.

There will be no jobs for no-time wannabes the day after the first UK airline goes bust.

Your touching belief that the airline industry will be saved by a recession that brings down the price of oil is extraordinary. The recession that bring the oil price down (though I don't see why it will fall far given the industrialisation of China & India) will put thousands of experienced pilots on the dole. Your 175hr log book and £60k HSBC loan will not be a great deal of use to your career as a 4 star burger flipper supervisor in the retail park McDonalds franchise.

Whilst the LoCos might pick up some pax trading down from more expensive carriers they will lose far more in discretionary sales. Given that most of the profit comes from selling tea and coffee at 37,000ft it doesn't even need people to stop flying to cripple the business model of some airlines. Bringing a flask is enough.

Be in no doubt that a recession will have the same effect as it did the last time in 1990 - 1993. For reference look up Dan Air and Air Europe to see what happens, how fast and how brutal.

WWW

Rugbyears

17th May 2008, 10:53

WWW - Now here's a thread to get your teeth into...! ;)

redsnail

17th May 2008, 11:58

I remember the recession affects in the early 90's. Next to no jobs for years. Folks had to go to the Middle East or Asia to get a look-in. Only those with extensive experience got a start.

I remember the crash in 2001-2002 as well. Nothing was available. Again, only those with thousands of hours had a chance. Most had to either go to NetJets Europe or head to the ME or Asia.

Contractors will be let go. Thin routes will be let go. Last in first out. Keep a very close weather eye on your own situation. Minimise your own exposure to debt based on future earnings.

leeds 65

17th May 2008, 12:11

FOR THE ATTENTION OF WWW :ok: :

1. First things first doing type rating with a company in next few weeks so nearly not a wannabe, but enough about me,quite frankly who cares.

2.Your smart ass comments are not well placed,your obviously a negative person riven by pessimistic views i couldnt be more different in mindset(so we will obviously differ in opinion).I feel your points are negative in the extreme.:{

3.Yeah sure you may have more airline knowledge im certainly not disputing that,however airlines are businesses full f$$$in stop,and like bloody humans its survival of the fittest.

You said:There will be no jobs for no-time wannabes the day after the first UK airline goes bust.

Well go ahead and give me 3 reasons how a small regional( in lets say, oh i dunno, isle of man)going bust will have such a drastic effect on big low cost or strong 'exclusive' airlines????thats right b$lix

researching low cost carriers recent quarterly and annual results its obvious that there is a slowdown.we all f$$$in know that . However and this is the key,most of the low cost airlines are reporting a drop in PROFITS so i presume your overlooking the fact that these airlines are still making handsome PROFITS albeit less than previously.You go ahead and give me 3 BIG low cost airlines in europe that are reporting significant full year losses as opposed to falls in PROFITS.

Lets look at balance sheets and a trip down memory lane perhaps.After 9/11 what happened.1.people traded down to low cost so good buy expensive airlines(cue Swiss) 2. LATE 2001 a certain low cost carrier ordered 155 planes as a result of strong cash reserves = more pilots over next few years needed. this move was followed by others=more pilots over the next few years

You Said:Be in no doubt that a recession will have the same effect as it did the last time in 1990 - 1993. For reference look up DAN AIR.

My response:

The reasons why Dan Air failed:
1.Among the main reasons for the airline's sudden "financial tailspin" and its ultimate demise were a lack of "vertical integration" with a major UK tour operator
2.Another important reason that was said to have contributed to Dan-Air's failure was the fact that its fleet contained too many different, incompatible aircraft types, and that some of these planes were considerably older and far less efficient than the latest state-of-the-art aircraft operated by some of its competitors
3.
Furthermore, some industry analysts viewed Dan-Air's decision to embark on a major expansion into scheduled services from its Gatwick base at a time when the UK economy was still mired in the early 1990s recession, the airline's financial position worse rather than improve it.

Dan Airs failure was more to do with crap management ,downturn just amplified the problems.Do you see the big low cost airline management of today making such vile incompetent errors.

Cheers

Lurking123

17th May 2008, 12:47

WWW, you may well be right about everything but, personally, I'm getting a little irritated at the manner in which you deliver the message of doom. It is almost as if you are taking some sort of sick pleasure. Give it a break.

kj990

17th May 2008, 12:50

So it IS different this time.

A downturn where more pilots are needed!

I'm off to get a new Porsche despite the boss saying profits might be down by £900m 'going forward'. What does he know, ppfff.

Rugbyears

17th May 2008, 13:10

kj990….

Sarcasm - is there really any need..?

Vin Diesel

17th May 2008, 13:19

Leeds 65,

Good luck in your Type Rating.

However I think you're wrong in your analysis of the current situation. Specifically I dispute your analysis of how airlines are reporting a profits and will simply report lower profits in the future as the higher oil price takes hold.

BA reported a full year profit of £883m for their previous financial year. This year ran 1 April 2007 to 31 March 2008. Reading a few financial reports shows that these results did not reflect the full price of the recent oil price hike as BA had hedged "well over half of that years annual fuel requirements at prices ranging from $82 to $90 a barrel."

Currently oil is trading at approx $126 a barrel. That is 40% higher than the BA upper hedged position of 07/08 of $90 a barrel.

The BA £883m profit is after a £2.1bn fuel bill. If BA have to spend 40% more on fuel in 08/09 this fuel bill would become £2.94bn - an increase of £840m. Which happens to be approximately equal to last years profit.

Also let's not forget that oil is currently trending persistently upwards and other 'experts' have predicted $200 a barrel. Ever increasing fuel prices will turn last years black ink after net profit into FY08/09's red ink for net losses.

Your analysis is looking solely at the past. FR/EZY/BA management along with all other airline management ought to be forward looking. They are worried about where the oil price is going. Ryanair is unhedged at the moment if i'm not mistaken and i don't know about the others. So while you may hope the airlines will simply report reduced profits i think that if oil continues at this high price then they will be reporting losses. We are seeing quarterly reports, and annual reports which are historic looking, wheras management are looking at monthly management accounts, advance bookings, loads and yields, and budgets which will reflect a range of scenarios.

I would guess that chiefly they are worried about what will happen the bottom line if oil is $120 a barrel, or $110 a barrel or $150 a barrel. Also they will be looking at what will happen if the load factor drops or the yield drops as a result of slowing consumer demand.

If the economy continues to slow then pax will surely cut some non essential travel, companies will reduce travel budgets. This will affect all airlines in some shape or form.

EZY and FR will probably pick up some price sensitive travellers who choose a budget carrier for a weekend break and save a few bob on a legacy carrier's fare, but you ignore the potential loss of revenue to the budget carriers some of whose pax simply choose not to fly for the same reason as the BA traveller switched to a low fare carrier. PResumably under pressure with mortgage repayments, petrol, home heating oil, food price increases and whose job security may be under threat.

I believe FR are grounding more aircraft through the winter than was the case last year, the BA announcement said that they were reviewing costs, capacity etc.

The strongest airlines will survive. FR has a cash mountain to ride it out. I presume BA/EZY do also. But you can be certain that Messrs O'Leary, Walsh and Harrison? will be taking steps to ensure that they minimise losses.

WWW is making the point that in the current economic climate that demand for new low houred pilots is certain to decline/cease in the short term. I believe he is right.

From reading this thread and the reactions to many of WWW's comments, many people seem to think that WWW is so pessimistic that he can't sleep at night for worry that the sun might not rise tomorrow. But his words of caution and advice to wannabe's seems to boil down to:

1. Demand for low houred pilots will decline/cease in the near term as a result of the wider fall out from a slowing economy and a rising oil price.
2. Avoid taking on £60k of debt in the anticipation that in 14 months time, with the only qualification to your name being an fATPL you will be able to walk into a RHS and repay £1k a month comfortably.
3. By all means continue training but do it at a pace that your current income enables you to afford whilst not putting the house, car, or family relationships in jeopardy.
4. The FTO's have a vested interest in selling you flight training so whilst they point to an imminent pilot shortage and encourage you to enrol on their course that perhaps the true prospects aren't quite as rosy as they will lead you to believe.

To me they seem sensible words of advice, from someone who is a skipper with a loco, has been an instructor at a big integrated FTO, has at least 10 years experience of the industry at the coal face, who is clearly well versed in economics, and whose wife works for a big bank which I think is a PLC.

This is hardly the ramblings of a drunk at the bar of your local.

Listen to all the advice then make up your own mind. Alternatively clamp the Peltors tightly over your head, ignore that Met and Notams and hope that in 14 months time you walk into the RHS of that A380. Carlsberg don't do pilot recruitment but if they did...

Wee Weasley Welshman

17th May 2008, 14:41

Thanks for that summary Vin - very accurate.

I'm not taking any pleasure in this. A perception that I am is more likely a displacing of anger from what I am saying onto who is saying it i.e. shooting the messenger. My airline will be badly hurt if we have a 1990s style recession. Pay rises won't happen, bonuses won't be paid, share options will not vest, base transfers will not happen and generally life will be a lot less sunny than has been the case in recent years at Weasely Towers. I have close friends who are hanging on by a financial fingernail and a full scale house price crash and recession will them really struggle and possibly lose their home. This is serious stuff.

A major problem with Wannabes is that they often have no idea about history. Most were in school or were a twinkle in their dads eye when the last recession and house price crash hit the UK. There is nobody out there that teaches you about the topic of airlines and recessions. For that reason I do take it upon myself to push out the lessons of history and provide warnings.

I make no apology for that. Its a free world. You can read what I write and ignore it, discount it or believe it. At least you've considered the opinion and then formed your own. Which is the point of this place.

To be a better informed wannabe.

Good luck,

WWW

Lurking123

17th May 2008, 15:00

WWW, as I said, I don't necessarily disagree with the message. Having been in the aviation business for a mere 23 years, I have also seen the highs & lows, suffered the uncertainty of where I will be next week/month/year and, without exception, always seen a recovery. Please do not patronise and assume that I have some form of displaced anger.

My point was the 'school teacher' method of delivery. Anyone who reads the newspapers can see that, in all aspects of life, people will need to think very carefully before spending money in the short/medium term. Please do not assume that everyone who reads your monologues is a spotty teenager just out of school.

Anyway, the Thierlet Diesel malarkey will undoubtedly slow down output from the schools for quite a while.:)

Wee Weasley Welshman

17th May 2008, 15:29

As a middle aged man with decades in the business of aviation then perhaps I can understand that you might find me annoying telling you something you already know plenty about thank you very much. Nevertheless part of the audience is composed of spotty teenagers just out of school.

You are old enough and ugly enough to look after yourself and if I patronise you then you'll just have to dry your own eyes and get over it.

Cheers ;)

WWW

nich-av

17th May 2008, 15:51

Anyway, the Thierlet Diesel malarkey will undoubtedly slow down output from the schools for quite a while.

Not sure about that... Diamond is already certificating its own Diesel engine on the DA-50.

If airlines can survive this year, the sun will shine again next year.

But Saudi Arabia -- and many economists -- say the high prices are a result of market speculation, the weak dollar, and demand from the developing world rather than a shortage of supply.
"We will raise production when the market justifies it. This is our policy," al-Naimi said during Bush's first visit in January. "Our interest is to hopefully keep supply matching demand with minimum volatility in the international oil market," he added.

http://edition.cnn.com/2008/POLITICS/05/16/bush.saudi.arabia/index.html

Their explanation of limiting volatility is justified. Imagine everyone starting to use alternative fuel or energy because of sky-high oil prices... it would be the end for the Saudi's.

Speaking of alternative energy, it seems that general aviation at least will be spared, no matter what happens with oil. Lycoming is willing to introduce and certificate ethanol piston engines.

http://blog.wired.com/cars/2008/04/embraer-sells-i.html

Embraer also has been selling ethanol conversion kits for customers who purchased earlier versions of the plane. The kits, manufactured by Textron Lycoming (http://www.lycoming.textron.com/), sell for $240,000. Embraer says that in addition to reducing fuel costs, converting an Ipanema to ethanol cuts maintenance and operating costs by 20%.

leeds 65

17th May 2008, 16:47

Fair points made all round.We are all entitled to opinions.lets see if it gets really bad in the coming months or not so:ok:

heli_port

17th May 2008, 18:13

Always look on the bright side of life..:)

Thx WWW & VD for your posts, very enlightning. I am one of those individuals that was a twinkle in my dads eye when the last recession hit and having you explain things clearly is appreciated.

:cool:

Philpaz

17th May 2008, 19:50

So with the demand for oil ever increasing along with the costs, the amount of oil ever decreasing, where does that leave the industry even without the oncoming recession? At $200 a barrel seats will be out of most peoples leagues, any new technology would likely cost so much to implement that most airlines would go bust trying. Whats the future of the industry then? Opinions?

yellowsubmarine

17th May 2008, 21:18

I have been following this thread for a while (in a fingers in ears, eyes shut, while singing LA LA LA kind of a way). However the more I read, the less I can carry on in my state of blissful ignorance.

Having just finished my IR and heavily in debt, I think now is a good time to admit 'I'm scared'. I'm off to find a short pier so I can take a long walk off it.

YS

bathtub

17th May 2008, 21:33

I am no longer a Wannabe, but perhaps a would-like-to-have-been: having chased the dream for several years (although never undergoing any commercial training), I took the difficult decision not to continue, on the grounds that my age and financial position represented a risk that was higher than I was prepared to accept, coupled with the fact that, painfully - though I cannot be certain - I do not think that my personality is best suited to a career as an airline pilot. I do, however, retain an interest the industry and the situation for people entering it, along with a continuing passion for aviation; and I am finding this thread extremely interesting and illuminating. My question is this: It is clear that the advice (of WWW and others) to people contemplating entering training is to hold off from beginning, or take it slowly, because of the gloomy economic outlook. But what about those who have already started training and are not in a position to vary the speed of the course, ie. those on integrated courses, and those who have a start date that cannot be changed? I appreciate that these people are unfortunately in a much worse situation, but is that anything that they can do to protect themselves, even slightly, from the risk of losing all that money (and the resulting long-term debt) in the name of a qualification that cannot be used?

redsnail

17th May 2008, 22:03

The only way they can protect themselves is to work as hard as possible to get the best grades and first time passes. This might help them get a recommendation for a job.

They may have to set their sites lower. Rather than believe that a jet job is owed to them that a turboprop job in the back blocks of Scotland is a great offer.

Rather than sit and wait for a job to fall into their laps to get out and head to Africa etc to get any job going.

Now, if they have a huge debt to service they'll need to talk to their bank manager ASAP before they get into trouble. If they can't or won't leave their home to get a flying job then they'll have to accept a non flying job.

Believe it or not, an adventure in Africa or blasting around the Scottish Isles in a turboprop will be fantastic. Only problem, that's not the dream the FTOs sell. :(

heli_port

17th May 2008, 22:14

Only problem, that's not the dream the FTOs sell. :(

My dream is to fly! what and where i fly is not relevant (for now). The only thing i am strictly against is paying for a type rating. :p

JB007

17th May 2008, 22:59

blasting around the Scottish Isles in a turboprop will be fantastic

Yep...it is! Did it for nearly 3 years, I would recommend it to anyone and everyone...do not set your goals at 'shiny jet' level, there is so much to experience...

I know of 2 guys this month, FI's with less than 500 hours TT who have secured good turbo-prop jobs in the UK...and we just got a 7.2% payrise!!! yellowsubmarine, you've now got the qualifications, secure yourself with some sort of a job, anything! Things are not dead yet, still a bit of 'movement'. We've all been where you are!

PPRuNe Towers

18th May 2008, 18:16

So what you are saying is it's going to be crap for a couple of years of £1000 pm repayments Rex?

Rob

Wee Weasley Welshman

18th May 2008, 18:35

Rex - did you miss the part about BA grounding swathes of its fleet this winter?

http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article3953811.ece

If you would like to point out which of my predictions post Sept 11th 2001 were inaccurate I would be grateful. The job situation for Wannabes was dire for two good years and only really started recovering towards the end of 2003. That was a loooong time if you had to keep renewing your IR and try to maintain some kind of currency.

I know you've got a vested interest insofar as you are already commited to an Integated frzn ATPL path. Please don't resent others trying to help people behind you in the system avoid a similar mistake.

Cheers

WWW

bathtub

18th May 2008, 19:58

Are you really going to get to the end of your life, having a conversation with someone else about all the big meaningful things and say "yeah I really wanted to be a pilot but I decided against it after reading some posts about the future economy on a public internet forum". ??? No, you misunderstand. My main decision to stop came several years ago, and was not solely a financial decision. I happen to agree with WWW's assessment of the way things are likely to go at the moment - but I also agree with you that over the long term there will be more flying and more opportunities for aspiring pilots. If the current economic outlook were the only issue, I would simply hold off for a couple of years, see how things go, and in the meantime work on some of the other aspects inherent in a) being a good pilot, and b) getting through interviews. There's certainly plenty to do.

No, my main issue is that I do not think I would make an outstanding pilot, difficult though it was to admit this opinion to myself. I have too great a tendency to panic in highly pressurised situations, and also I think at a slightly slower pace than reality, so that, especially in a fast jet aircraft in an abnormal situation, I think I would be 'behind the aircraft'. Plus I'm useless at interviews! There is of course a reasonable chance that I would be able to overcome all of this, but I have tried to in several ways over the course of several years, but unlike other aspects of my personality, have not been able to change it. It would be a big risk to take to assume that it would work itself out.

And, by the way, I very much like redsnail's suggestions of alternative career paths. I for one would love both of her examples, in particular flying around Scotland in a turboprop - in many ways better than big jets. I have found it difficult though to find out about the various flying opportunities abroad.

PS Sorry if this turns out all as one paragraph - for some reason the system doesn't seem to be recognising the gaps between lines I am putting to separate the paragraphs out....not sure why this is.

Wee Weasley Welshman

18th May 2008, 20:42

Rex - if I wanted to shout you down then I would have done so. I fail to see how backing up a point by posting a link to the more detailed article is in some way a negative thing e.g.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/18/cnbranson118.xml

..the aviation analyst Chris Avery, of JP Morgan, who calculates that most of the major European carriers face huge increases to their fuel bills as their hedging positions run out. Avery said BA will have to pay an extra £1bn in fuel costs this year, while Lufthansa will have to find an extra €2bn (£1.6bn) by 2009. Virgin Atlantic's fuel bill is 70pc hedged over the next year.

My opinion is just that. My opinion shared by journalists and authors or statisticians or economists becomes something of slightly more weight. Quite a few Wannabes just don't read this sort of stuff. They hear the marketing spin of schools and note the recruitment story of last year. Not so on this thread.

Just why you think I should be more humble to you is a mystery. If you spent more time talking about the upside of the current situation and less time attacking me you might get further. You could be talking about the bouyant contracting market that operates globally. You could be talking about the relatively painless easing of the labour market as the Poles go home. You could argue that the current oil price is largely driven by asset speculation just as Gold was over the last 6 months before it suddenly fell 10%.

But you just whinge and bitch about how tedious this thread is.

Come on - raise your game.

WWW

nich-av

18th May 2008, 22:01

What's your prediction for Farnborough WWW?

Mine is over 1000 turbine aircraft orders/mou's for deliveries within the next decade. I hope BA announces the A350XWB MoU.

C-series is launching, QR and probably LH, maybe EK are ordering.
MRJ is launched, will take-up some customers from here and there.
SSJ will fly in a matter of days, will get some additional orders, I guess.
This is the first air show after EIS of the A380...should bring more from that side I think (mainly from Asia).
A350XWB orders are piling up, people need to secure delivery slots if they don't want to wait til 2020.

I think that this air show will show that aviation is not scared of this short-lived "downturn".

There's no one at any existing airline believing that crude oil demand to supply ratio can rise 300% in less than a year. People who believe that are naive.
Oil will not rise to 200$, not in the next 10 year (adjusted for inflation of course).

I actually expect it to drop below 120$ this week already, because no one is buying any longer.

Adios

18th May 2008, 22:08

I'd be reluctant to rely on a stock analyst at a brokerage firm, especially an American one, as a credible source. If he's spouting verifiable facts, as WWW quoted that's one thing, but watch for the opinion part of the story because that's where the spin will come in. There's no telling what he is selling short or wanting to buy cheap.

Wee Weasley Welshman

19th May 2008, 12:20

I think you'll find Chris Avery does have a strong track record of issuing notes on the airline sector in the UK. JP is a broker admittedly but Averys comments do have the ability to move the market and he has access to data way in advance.

I think United will go bust, a UK airline operating >100 seat jets will go bust and another will be sold for their assets by Feb 2009. The Western world ain't going to be short of pilots. Whether the Eastern world can absorb the surplus is going to be key to Wannabes who do have the option of suppling themselves very cheaply to airlines. Though by doing so it does call into question the rational of the debt they have taken on.

WWW

Re-Heat

19th May 2008, 13:58

Yes, many people used to be of the same opinion of brokers plugging both their own clients and terrible positions.

However, in the wake of separation of analysts and bankers (i.e. not allowed to speak to each other, and communications monitored), their use in plugging terrible positions has gone, and they are a much more valued opinion.

Whether or not you believe them is up to you - few others have the connections they do to see the true direction of the market.

redsnail

19th May 2008, 14:00

You have to pick your market and be flexible with your dreams.

Since it's in the news (http://www.flightglobal.com/articles/2008/05/19/223757/this-week-briefings.html), NetJets Europe have ordered an additional 20 Falcon 2000LX and will convert 10 existing EX orders to LXs.

EBACE (http://www.ebace.aero/) is rapidly growing as the place to go to learn about the industry and drool at the shiny toys.

This year is the first year NJE and others will run a "meet and greet" learn about the industry stand.

MarkColeman

19th May 2008, 18:40

Interesting little article from the RTE website: http://www.rte.ie/news/2008/0519/economy.html

A new report on consumer attitudes and behaviour has found that the rising cost of living is having a direct impact on everyday lifestyles.

67% of people are now more conscious of their finances than they used to be, according to the findings of a study by consumer research firm Mintel Ireland.
The report follows last week's figures from the Central Statistics Office, which showed a slowdown in consumer spending.

The volume of retail sales in March fell by 1.8% compared with February, the second monthly fall in a row.

February saw the first annual drop in sales for four years.

The report found that consumers are tightening their belts in key lifestyle areas such as entertainment and eating out.
64% of people said they plan to eat out less often while 42% are prepared to cut back on grocery bills.
60% said they would buy fewer clothes and jewellery. More than half would cancel DIY and home improvements and cut back on treats for the family.
But the report found that when times are tough most people will still find the money to go on a big summer holiday and short breaks.
Separately, European Central Bank President Jean Claude Trichet has warned that the world is experiencing an 'ongoing and very significant market correction'.
He advised policymakers to make price stability their top priority.

He said inflationary pressures were being added to by oil and food price hikes.
Mr Trichet said these are demanding and challenging times.

So there you have it, no matter how poor everyone gets the demand for holidays will remain as strong as ever!!

Well not quite, but at least its a bit of optimistic reading. However i bet whoever wrote that article will feel pretty stupid in 12 months time when, like WWW predicts, all the airlines in this part of the world have gone bust and we're all starving and homeless!!!

p.s the wannabes will be starving, homeless AND owe 80 grand to the bank.

the end.

A and C

20th May 2008, 08:17

The report above seems to indicate what I have been saying, that the big annual family holiday is the last thing that will get dropped.

This should be worry to the likes of Easyjet and Ryanair as the weekend in Europe is a big chunk of the business, It should also be a bit of comfort to the I.T. companys who sell the whole two week packages that make up a big part of the "annual" holiday market.

The public are also catching on to the fact that the lo-cost airlines are not as cheap as might be expected for the low service levels that they offer.

With this in mind I wonder would the local expert on this thread like to predict which low service airline (sorry lo-cost) will be the first to go bust?

Over to you WWW !

BitMoreRightRudder

20th May 2008, 09:05

I get the feeling you would be quite pleased to see a loco go bust A and C.

Am I correct?

geordiejet

20th May 2008, 09:32

I think the LCCs will always do well, particularly from the regions. Take NCL, you only have three European destinations with a full service airline. MME has just one.

Most routes are operated by no frills airlines. So, whether or not we want a full service airline or not we have two choices. 1) Stick with the no frills airline. 2)Change in London, Paris or Amsterdam if want a full service airline (and pay a LOT of money for the priviledge).

Option two is no good if you are off for a weekend break, or just a daytrip. As travel time will seriously eat in to your stay. Nor is it any good for those of us who are tightening the purse strings, and documented in many reports of late.

So whether we like the onboard service or not, flying a no frills airline is many times more convenient in a lot of cases than transferring, and I don't think the no frills concept will have any problem attracting punters, despite the actual cost saving may not be as great as the percieved cost saving.

Who I think may have an issue would be the airlines that many percieve as 'full service', but infact, have a no-frills service onboard. Such as EI and BD (not all flights, but quite a few). And those airlines who do cater mainly for the family holidays - such as the charters. If families are cutting back on the Summer holiday, then the tour operators may have a hard time filling the planes.

Wee Weasley Welshman

20th May 2008, 10:07

I don't know. In the last recession it was Air Europe and Dan that went bust and they were the big IT holiday firms and post Sept11th it was MyTravel that went closest to the brink. As the high street package holiday draws the majority of its customers from socio enconomic B's and C's who tend to be the customers of Picture Loans, Ocean Finance and have remorgated their 3 bed semi to the hilt since 2000 then it is that customer base that I would be more worried about than the Lo Co's.

I took a plane load of business suits to Edinburgh this morning and plane full of boat owners down to Nice straight after. I doubt many of them had CCJs and there certainly weren't many tatoos or shell suits.

I strongly suspect that we are about to watch the industry conduct a massive money bleeding competition. Those that run dry first will fail. Those that hang on will recover to a much rationalised playing field as the recession ends. BA are well capitalised to do this as are EZY and RYR. Several other airline are a mystery when it comes to captialization and some of the IT airlines are owned by very large comglomerates who can cross subsidize if they want to.

I don't know. I do suspect that it will be a bumpy road though.

WWW

A and C

20th May 2008, 12:28

I have no wish to see any company go bust, Ive done that thing and would not like to see it happen to anyone.

However some on this forum seem to think that being in a "low service" airline is safest place to be, I don't see why they would be immune from the situation, WWW looks back to the 80's and talks of the end of Air Europe and Dan-Air forgetting that at that time the "low service" sector was yet to happen and so can't be used as historic evidence.

He also looks down on the Socio economic B's & C's forgetting that the total spending power of this large group of people is far more than the "A" group that he seen slumming it on his low service airline because they cant afford to fly BA club class.

This economic downturn won't get the top of the "A" group out of the Lear jets to fly on a low service airline and you can't base the future of an airline on the class A,s that are feeling the pinch simply because there are not enough of them ! Face it the future is in the hands of the masses and most of them are class B & C.

Wee Weasley Welshman

20th May 2008, 13:06

Well, apart from disputing your assertion of the 1980's examples which were actually from the 1990's and the MYT wobble which was from this decade, I don't dispute and have never maintained that the coming major recession will have anything other than a dire impact on the operations of all major airlines including the low cost sector.

Why you seem to want to start a willy waving competition about which of our employers will win/lose the most is not clear to me.

My comments regards the social profiles of the customer base for different types of airlines are just true. It wouldn't bother me in the slightest if I made a million pounds a year out of a million chavs or a million pounds a year out of one billionaire. I happen to look down on and despise the Chavs of this country on a personal level - but thats just a prejudice that I have to labour under. Just because someone drives Chavs, Cargo, Students, City Folk or Royalty around I don't think I either look down or up at them as a fellow pilot. Same as flying a 747 impresses me no more than flying a 717.

WWW

leeds 65

20th May 2008, 17:50

I wrote about this previously.Dan Air failed through vile management decisions and reckless moves,the recession just made it worse.:ugh:

Wee Weasley Welshman

20th May 2008, 18:21

Whilst not wanting to get overly side tracked into a debate about Dan the point is that that is what recessions do. They cause weaker businesses to suddenly fail. The ones that have a muddled brand or inefficient structure. Those whose revenues are weak or whose management are flat footed.

The recession is what pushes them to the wall. Its hardly ever the case that sound businesses with good capital reserves fail as a direct consequence of the cyclical turndown in the economy.

If you believe a recession is happening then predicting the future is merely a matter of understanding particular businesses trading position. Not always easy to do with airlines.

But there are one or two likely candidates.

WWW

chrisbl

20th May 2008, 19:39

Easy are the most likely LC to go -weak balance sheet and all that.

Right Way Up

20th May 2008, 19:56

Easy are the most likely LC to go -weak balance sheet and all that.

Where did that come from?? :confused:

Wee Weasley Welshman

20th May 2008, 20:00

You think 31/03/2008 2nd qtr £2,956m Total Assets vs £1,793m Total Liabilities is a weak balance sheet? Cash and Short Term Investments total £906m - and this at the end of the winter.

If you think that's a weak balance sheet you're on drugs or don't know much about the airline business.

WWW

saccade

20th May 2008, 20:09

http://www.forbes.com/feeds/ap/2008/05/20/ap5030663.html

"high oil prices could have "dire consequences" for airlines."

"All European airlines will cut back on flights and raise ticket prices, he said, estimating that total capacity will fall about 10 percent over the next year, and average fare prices will go up by about 5 percent. Some airlines may go out of business, he added."

The words above are an estimation, but are there still any people around who are considering an 70k loan for flight training?

Wee Weasley Welshman

20th May 2008, 20:12

This is rapidly getting worse - Oils now popped its head above $129 a barrel in New York right now and Oil Futures prices is going bonkers.

The Futures price should be lower than todays price but it isn't and has climbed all month. People are making long term bets that Oil is going to go higher and stay higher. This really is starting to look bad. Above $150 a barrel it will be game over for many Western airlines and pilots will be in the soup kitchens sat next to the estate agents.
:(

WWW

Diaz

20th May 2008, 21:45

It will be interesting to see just how long it takes for the world to realize that this is going to be one hell of an economic shift. I still have confidence that some technology will come around to solve the problem of running out of oil- the only question is when and how much?

zapoi67

21st May 2008, 00:13

Hell !

Had almost decided to realise my dream... but after reading all this.... :{

I am really puzzled. I (we) have only ONE life, I have understood that I am having a hard time in my professional life because of "having forgotten" my dream to be a professional pilot. As I said above, the decision to get the money from the pension fund (without going into debt) was almost taken, my wife and my son already prepared the "Plan B" in order to live 1,5 year without me. I was looking for flight schools in Canada and South Africa, the dream was about to come true... What should I do now ? :ugh:

Getting back to everyday's life, looking for the (n+1)th feeding job which, even if well paid, will not satisfy me ? :{ And go on with looking up into the sky, while walking to the office. :{:{ Dreaming about flying over the savannah while sitting in front of a PC screen.... :{:{:{

I hate my life !! :(

nich-av

21st May 2008, 09:28

Don't bother the oil prices.

Huge American companies are trying to hedge their losses by converting their devaluating bucks into oil and gold.
That gives these products unprecedented rates.

So yes, all these corporates and banks who are hedging their bucks into such products need to send analysts to the media to let them tell that there is a huge shortage of supply with increasing demand to explain the situation.
Oil has now risen 100% compared to the same period last year.

Does it mean that demand to supply ratio has doubled in the same period? no.
Does demand to supply ratio increase with increased prices?
no.

Wait till some major car producer (who are all increasingly struggling to sell their vehicles due to higher oil) comes up with a manageable electric car and you'll see the oil prices crash with all these entities trying to get rid of their overvalued oil (which is by the way 6 times overvalued by now).
.

Diaz

21st May 2008, 11:13

The key thing with all of this is to go in with eyes open and understanding what awaits you- only you can say if the risk of the current market is worth the cost of training.

For me, I'm going to go through university, and see what the market looks like on the other side, and see if the doom and gloom predicted comes true.

Wee Weasley Welshman

21st May 2008, 16:34

American Airlines has announced plans to cut jobs, retire planes and reduce capacity as the world's biggest airline becomes the first carrier to reveal the impact of the surge in oil prices.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/21/bcnamer121.xml

About 45 planes will be dropped from its American fleet and the airline said it is still assessing the number of jobs that will go from its 85,500 workforce.

This is but the first of many. The industry is headed for a full speed crash in the West. The evidence is all around you. Protect yourself and avoid debt, don't pay in advance and don't let your dreams run away with you.

WWW

redsnail

21st May 2008, 18:11

** big deep breath in **

No one is saying "give up your dream, never learn to fly". What a few of us are saying is "don't go into a huge amount of debt with no clear way to finance it. Instead, if you don't have a spare 70k GBP sitting around, do the flying in chunks to time it so you're current when the hiring begins - as it will again like it always does"

So, to say again. It is a wise idea not to go heavily into debt on a full time course with NO conditional employment contract.

ok?

BIG MISTER

21st May 2008, 18:38

Sound Advice WWW and Redsnail :D

Live for today......but plan for tomorrow ! ! !

:}

zapoi67

22nd May 2008, 09:44

Thanks for the advices. Two more things :

1) I'm already 40 y.o. So, IF I'll decide to start with the training, I'll be doing it full-time.
2) What's your advice about using the money from the complementary retirement fund ? In this case, I wouldn't have any debt. Just less money earning when I'll be retired.:p

Thanks for further advice !

Re-Heat

22nd May 2008, 10:03

You would likely be penalised in tax terms if you use a retirement fund. I would not advise you to ever use that.

FT article:

If only suitcases were all the baggage America’s airlines had to carry. Unfortunately, fuel is the big burden weighing down aircraft. American Airlines’ decision to slash domestic capacity and sting customers with extra luggage charges is just the latest attempt to counter the surging cost of oil. It will not be the last.

Nymex crude oil, currently nudging $134 a barrel, has averaged $105 so far in 2008. If it maintains that level for the rest of the year, the total fuel bill for America’s top 11 airlines would rise by 39 per cent to more than $43bn, based on CreditSights’ estimates. To put that incremental cost in perspective, it would, all else being equal, eat up more than half the cash sitting on the airlines’ balance sheets at the end of the first quarter.

Airlines, therefore, are trying to raise passenger charges fast enough to outrun crude oil prices that are savaging the cash cushions built up since the last round of bankruptcies. In the space of just over a month, AA has participated in no less than 15 fare increases. If that were not evidence enough of desperation, the bald statement by AMR, the airline’s parent, that “the airline industry as it is constituted today was not built to withstand oil prices at $125 a barrel” certainly is.

So far, customers have continued flying. As with $4 petrol for motorists, the airline industry is testing the limits of what passengers can bear. AA’s latest move, resorting to more add-on charges rather than headline ticket price increases, suggests that limit could be close to being breached. If another round of bankruptcies occurs, there is little scope for further restructuring given previous cuts. Little wonder, then, that AMR stock, along with that of many of its peers, plunged by double-digit percentages yesterday. Investors should not regard that as a buying opportunity.

Wee Weasley Welshman

22nd May 2008, 18:32

$135 Oil is here. If the evidence keeps growing like this then we won't even have to wait until the traditional Oct/Nov time for airlines to start going bust.

A mild industry recession is a disaster for Wannabes. I think many industry commentators think we're past Korma, into Balti and the Madras is on the way out of the kitchen.

I haven't checked but I expect to see the prices of flying training courses rise noticeably shortly. Fuel is roughly 20% of the cost of CPL and Multi IR course.

WWW

Wodka

22nd May 2008, 19:08

2 for 1 at the moment...

http://www.knives.co.uk

mason

22nd May 2008, 19:17

Lads at the end of the Day were all rats in a barrell trying to get to
the top some rats give up early and drown the others keep trying .
the question is which kind of rat are you ?

BIG MISTER

22nd May 2008, 21:49

I'm a BLACK RAT = Move over ! ! ! ! :ok:

chris-squire

22nd May 2008, 22:15

Well none of this is exactly inspiring reading for someone such as myself who has just plunged into debt and started training. Having nearly completed my PPL and soon to be diving head first into ATPL's it does concern me when AA are shedding airframes. Infact it frankly scares the **** out of me given the financial responsibility that ive taken on to do this! :uhoh:

However, just to play devils advocate..... what hasn't been mentioned (as far as I can tell) is the hurrendous world wide shortage of Instructors which is bound to have a knock on effect with the number of people now entering the industry soon at an all time low. Not to mention that according to a few BA recruitment folks, they are reopening some form of sponsored training again in about 8 months time. Whilst I remain sceptical about this and doubt that it will be anything like the ab-initio sponsorship that they have offered in the past, surely this is a positive outlook. :)

One more thing.... despite rising Oil prices, the hurrendous **** up that was T5 and the LHR crash all in BA's last financial year....they still made record profits which were 45% up on the prior year.

So maybe things arent as bleak as you may think? Yes of course my view is slightly biased but I am remaining impartial about this...I have to because I do have a rather large debt to pay back at the end of my training and I wont be sticking my head in the sand whilst Mr HSBC comes knocking...i jus tthink that there might actually be a positive outlook on the horizon rather thatn the doom and gloom thats forever mentioned on here.

Grass strip basher

23rd May 2008, 06:33

At an oil price of $120 BA will make a loss this year.... and they are talking about parking some aircraft... why would they re-open a sponsored training scheme when they think they have excess capacity? Sounds like driving looking through the rear view mirror to me....

Wodka

23rd May 2008, 07:41

@ chris-squire

BA's costs related to T5 will mostly be in this financial year, not the one just reported. BA have also stated that the margin of profit made last year will be WIPED OUT by the current Oil prices (Assuming the price does not fall back down below $100) They are also planning on grounding older less fuel efficient airframes over the winter.

ALSO...

From today's Guardian

Cheap flights boom over, says BA chief as oil hits new high

http://www.guardian.co.uk/business/2008/may/23/theairlineindustry.britishairwaysbusiness

Britain's leading airline boss declared the era of cheap flights over yesterday as the price of oil hit a record high for the third day running.

Willie Walsh, the boss of British Airways, said the soaring cost of oil allied to global economic uncertainty would force airlines to raise fares in a scramble for survival that will see many of them go bust.

After a day of heavy trading oil rose to $135 a barrel as fears over supply shortages in the US sparked more buying. A year ago a barrel of oil cost just $65 but the price has risen relentlessly, driven by demand from developing countries and speculation on the world markets.

The soaring cost of fuel is also having a painful impact on the wider economy and brought renewed calls yesterday for the government to scrap rises in duty planned for the autumn as motorists face increasingly steep increases in the cost of filling their tanks.

The AA said drivers would pay more than £110m more on fuel over this weekend's bank holiday than over the same period last year. Average petrol prices have risen to 112.5p a litre while diesel costs an average 124.2p.

A day after the world's biggest carrier, American Airlines, announced huge cuts in routes and jobs because of the rising oil price, Walsh said budget airlines would have to increase fares and add-on charges such as baggage check-in fees and that many unprofitable companies would simply go bust. "The industry has no future if it does not price in its costs."

Asked if cheap fares for customers who book flights far in advance will disappear, he said: "My view is yes," before issuing a warning to low cost carriers Ryanair and easyJet, who rely on low ticket prices to pack out their aircraft.

His prediction will mean the end of a golden era for consumers who have become used to cheap flights to cities all over the globe and which has revolutionised the travel industry by putting hitherto unheralded destinations such as Jerez and Tallinn on the tourist map.

"If these prices are not available it will not encourage people to take short trips," said Walsh.

He added that many airlines would not survive a life-threatening combination of expensive fuel and a drop-off in demand as passenger numbers decline due to expensive fares and dwindling consumer confidence.

"This is about whether airlines can survive. If you look at a lot of the low-cost carriers around Europe, a lot of them have not been able to make money when oil was $80 per barrel," he said.

Despite announcing record profits last year, BA is expected to lose money over the next two years as its bottom line is wiped out by the oil price. Walsh confirmed that, as well as raising its fares, BA will cut thousands of flights this winter as its drops its least profitable routes and grounds its oldest, most fuel-thirsty planes.

The BA chief executive also refused to rule out another hike in fuel surcharges, which are levied on customers to cover the rising cost of oil and already add £158 to the cost of long-haul return flights. "It could be [a rise in] fares, it could be surcharges. Or it could be a combination of both," he said.

Fuel accounts for around a third of airline budgets and its escalating price is forcing airlines to pass on the cost to consumers because they are running out of overheads to slash in their own businesses.

The cost of fuelling a transatlantic flight, the most profitable part of BA's business, has quadrupled since 2000 to $44,000 (£22,200).

EasyJet admitted this month that its costs had risen by £4 per customer due to higher fuel prices - an increase that it is struggling not to pass on in fare increases.

Budget airlines led by Ryanair and easyJet are mitigating the increase by charging higher fees for checking in bags and priority boarding passes. Their business models are predicated on packing their planes with passengers through very cheap fares and then generating extra profits through charging those customers for add-ons such as baggage check-ins and car hire deals.

Analysts have warned that high fuel costs spell the end of the cheap flights boom, which has taken Ryanair from a provincial carrier to the world's most profitable airline, but is now under threat due to fares pressure and falling disposable income.

"All we have done is factored in the oil price. We have not even factored in a consumer slowdown yet. The real problem is the price sensitive consumer. What happens to them when they push their prices up," said Andrew Fitchie, analyst at stockbroker Collins Stewart.

An easyJet spokesman said fares would be kept low in the short term because there were too many European budget carriers. However, many of those airlines would go bankrupt over the next year, allowing the likes of easyJet and Ryanair to raise fares in order to accommodate fuel costs.

saccade

23rd May 2008, 08:19

Not everyone agrees with W. Walsh:
Commercial Director OAT on the public OAT forum (21-05-08):

I would suggest it would be foolish to read very much into this possibility of some aircraft being grounded. It's not especially unusual for airlines to ground aircraft (Ryanair will do something similar this year as they did last, and these are brand new ones). An airline is, after all, just a business, and all businesses have to adjust capacity as demand varies. The particular problem for an airline is that they are dealing with very expensive assets, which they need to order 3 years or more before they anticipate needing them, and they are then in the fleet for 10 years plus. Given that economists have trouble predicting more than a year ahead - and sometimes less - it would be hardly reasonable to expect an airline to get their sums exactly right and continuing to be valid over a 15 year period!

The other key point here is that ATPL training itself takes approximately 18 months. We simply cannot predict that far ahead. All we can say is that pilot recruiting trends on a world-wide basis continue to look favourable. There are certainly going to be peaks and troughs about that trend line - there always are, but there is no reason to suppose that it's going to change direction, oil prices and UK/US credit squeeze nothwithstanding. What we cannot do, however, is to predict what is going to happen in terms of pilot recruiting for an individual airline that far ahead. What we can say is that BA is a very strong business and far better placed than are most to weather temporary financial issues. It's current profits - despite oil prices and other factors - are actually pretty impressive. So worrying about the future recruiting position is almost certainly unnecessary. Better to concentrate, as one correspondent has already indicated, on completing the training and getting high-grade results. At least you have some control over that!

Trust this helps.

http://ask.oxfordaviation.net/viewtopic.php?t=4487

Wodka

23rd May 2008, 08:31

ha ha ha

Well the head of a flight training organisation can always be trusted to give us fair impartial advice can't he?

That's almost as good as...
** Buy now! Huge discount available for people who pay upfront **

WAKE UP!

AIRLINES GOING BUST = FLOOD OF EXPERIENCED PILOTS ONTO JOB MARKET

Airlines WILL go bust over this, read the facts, make a conclusion yourself.

Grass strip basher

23rd May 2008, 09:18

I know who I would rather believe about the outlook for the aviation industry if it was a straight choice between the CEO of British Airways or a bloke who's job is getting people to part with the best part of £100k to get a frozen ATPL with no guarantee of a job at the end of it. Would you honestly expect OAT to say anything different??

And elsewhere in the news another one bites the dust... think these guys were offering self sponsored type rating for second officers just a couple of months ago.... http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article3989923.ece

potkettleblack

23rd May 2008, 10:36

Take what OAT or Jerez or any other FTO for that matter say with a grain of salt. In fact I would say as much to take their advice and ignore it for the marketing spin and hype it is.

When I started looking at getting into this game back around 99/2000 I remember heading off to the Flyer shows and calling up the big schools leafing through glossy brochures etc. I discovered pprune around the same time. The message coming out was I had to go integrated plain and simple. All the jobs were going to the integrated guys (according to the FTO's). BAE as it was then known wouldn't even consider giving me a place if I wanted to go there as a mod student. Oxford were the same.

A short time later 9/11 happened. Emirates, BA, BMI and Aer Lingus to name a few pulled the plug on cadetships and the steady stream of cash into Oxfords and BAE's coffers dried up. Guess what? Yep realising they no longer had any customers MODULAR suddenly became the flavour of the month. New "products" were created with great sounding names. At the end of the day it was still a modular course, just severely overpriced for what you could get elsewhere and you were competing with just as many people for a few jobs.

Anyway this is risking thread creep but hopefully lets put to bed what Saccade posted.

Re-Heat

23rd May 2008, 10:57

I love this bit:

What we can say is that BA is a very strong business and far better placed than are most to weather temporary financial issues. It's current profits - despite oil prices and other factors - are actually pretty impressive.
Well, no, it is not impressive. The share price is in the doldrums as there is nigh on no growth in the business, and the return on capital is poor. While they may have a 10% op margin, nobody expects that to be maintained and the only reasonable growth prospects are through OpenSkies.

When BA announces it is to park aircraft, I would be more worried than if Ryanair were to do so. Not only do Ryanair carry little cargo, they do not fly longhaul. For a longhaul carrier with significant cargo carriage to consider parking aircraft, it is a big deal.

18 months not a long time? I beg to differ. We have already seen almost a year of the banking crisis, and only now is the real economy suffering. The last thing you want to do is graduate into a dead market in December 2009.

heli_port

23rd May 2008, 12:06

18 months not a long time? I beg to differ. We have already seen almost a year of the banking crisis, and only now is the real economy suffering. The last thing you want to do is graduate into a dead market in December 2009.

I will graduate in mid 2010 and hopefully the situation would have some what corrected itself. I however understand the risk i am taking but i feel it's a managable risk thus i'm moving forward ;):p

chris-squire

23rd May 2008, 16:10

What Airlines are going bust at the moment or look like they are about to....just out of curiosity???? Perhaps BA will make a loss this year and as someone correctly pointed out, the majority of T5's costs will actually fall into this year. But the industry always bounces back. I'm not so sure the future is as bleak as many of you like to bleat on about. Im not blind to the issues that the whole economy currently has, but aviation and tourism as a whole is worth far too much money to let it go down the plug hole. There maybe a blip for the next year or so but sooner or later it will pick up just as it always has.

BA are definitely looking to start something up again aparantly. My brother works for BA and was told by a couple of Captains. As I said earlier, things change so I am always sceptical about any form of sponsored training. I very much suspect it would only be Type Rating or MCC sponsorship if anything does happen but it goes to show that things arent all doom and gloom.

Oh and one final thing.....if there are so many pilots around then why have Emirates just reduced their minimum TT requirements? Why have BMI recently been advertising for FO's with 100 hrs PIC? Why do Aer Araan continue to recruit 300 hour pilots? Why are Easy Jet still offering their sponsorship? Why is Ryanair still taking on pilots hand over fist?

Cheer up guys! :ok:

Wee Weasley Welshman

23rd May 2008, 18:06

Thats right Chris. Everything is fine and I shall stop my bleating.

I could understand back in Sept07 and in the New Year and even a few months ago when people here argued that there would be no crisis and that I was a partisan part time economist with an agenda. I struggle to understand now how anyone cannot see that the crisis I warned about is actually here, right now.

If you don't think this is a crisis. If you don't think front page headlines, airline CEO's statements, shareprices and the evidence of your own eyes as aircraft get sent to the desert and bankrupcies get filed then, frankly, you are beyond help or guidance.

You are witnessing a full speed US/UK house price crash (>10% 12 month falls) and a technical Recession coupled with an Oil Crisis.

If you are a UK Wannabe airline pilot then this is a TOTAL DISASTER. Perhaps you will only discover this when you actually start job hunting yourself.

WWW

tonker

23rd May 2008, 18:19

10% house price drop, good one.

I recently looked at a new house costing £217,000. To cut a long story short i managed to get them down to £180,000, they pay the tax and duty, they pay my 5% deposit, they carpet it with white goods also, and finally they offered to pay us £350 per month for 2 years to help with the mortgage.

See you in 6 months i said. 10%, Who are you trying to kid.

geordiejet

23rd May 2008, 18:45

Chris: I wish things were quite as good as you say. But your post sounds a bit like a glossy FTO brochure, where everything is just fine and dandy. Or the speil they give you at an open day:eek:.

The best BA will come up with will probably be a SSTR, probably with a bond attatched to it. No doubt it will be highly overpriced. I can't understand why they would do this though, as there surely must be a lot of OAA graduates in order to fill the spaces - almost all of them keen to work for the 'gold standard' of all airlines.:ugh:

Ryanair do take on FOs, but, I've heard that there are some FR FOs that do not fly that many hours, as they are overcrewed. But keep pumping through new recruits into the holding pool as it is a good money maker. And encouraging applications along with a £50 fee, in itself has to be a nice little earner.

According to BMI, 'immediate needs for the coming year have been met', . A similar story with easyJet too - and you still have to provide a lot of money for the course when they do, not true sponsorship - when they do take on more people, early next year. Then there is the easyJet holding pool.

But we hope! :confused:

Wee Weasley Welshman

23rd May 2008, 19:12

http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article3989923.ece

Silverjet fights for survival in cash crisis talks

Silverjet, the start-up business class airline, was today fighting for survival after admitting it is in crisis talks to secure funding after it was unable to draw down a bail-out loan arranged just three weeks ago.

The company suspended its shares this morning after revealing that its..

MaxJet, Eos, EuroManx, Oasis gone now SilverJet trailing smoke - all basing business on UK air transport ticket sales. Winter groundings for BA and Ryanair and this is the START of the lucrative summer season. Autumn will be carnage at this rate.

Protect yourselves.

WWW

veetwo

25th May 2008, 08:59

Amid all this carnage comes news that easyjet are indeed recruiting more people on to the 320 LGW fleet at the end of May.. at least its not ALL bad news!

V2

potkettleblack

25th May 2008, 09:18

And yet in the Terms and Endearment forum someone is saying that Easy crews may be farmed out to Etihad so who do we believe.

Also there is a whole bunch of US airlines in Chapter 11 at the moment. Could be quite a few of our US cousins hitting European shores in the not to distant future with many many thousands of hours under their belts in search of greener grass.

helimutt

25th May 2008, 09:34

WWW, I am wholeheartedly behind what you say. As someone who self sponsored albeit it in the rotary world, after spending £110K I had no guarantee of a job and was lucky enough to secure one a couple of years ago.
If I thought about everything I had to put myself through to get here, would I do it starting right now? Absolutely no way in hell would I.!!!
I just wish people would open their eyes a bit more. All that glistens etc etc

Don't believe the hype. Wait some time. If you have the money in the bank then great, leave it there a bit longer. You could actually use the fall in house prices to invest when they hit rock bottom.

I missed out on a few opportunities during the early/mid nineties which see my friends as virtually millionaires now at my age. Just wish I'd stuck with them but no, I thought I knew best.

If you're in your early/mid twenties believe me there is no rush. Let the dust settle before committing. Believe me, it'll get worse before it'll get better. Why does no-one believe me when I say this?

Just go buy any financial supplement and see who is doing well, which firms are making money, what is expected to happen over the next few months.

Taking bets on major recession! Might be a short one (we live in hope).

heli_port

25th May 2008, 10:08

Why does no-one believe me when I say this?

Their are lots of experts with allot of different opinions. They all agree that the general trend is down but how far it will go is anybodys guess. A few weeks ago i remember reading that the banks are actually over stating their losses and will actually mark these losses up as huge gains later.

I feel the priority at the moment is to strengthen the dollar, see what we can do about oil supply and somehow bring down the interbank libor so we can get to a more 'liquid' position.

Anyhow back to reading my atpl manuals..;)

heli_port

25th May 2008, 10:18

Interesting reading:

http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/05/trichet_beware_the_oil_shock.html

What if the Bank of England were not to bear down on inflation in the face of the upward pressure from rising global energy and food prices?

What if it were to respond to popular, corporate and political calls for cuts in interest rates, to give some oomph to an economy slowed down by the credit crunch?

In a worldwide trawl of bankers and economists - which I made in preparing a documentary to be broadcast at 8pm tonight on Radio 4 ("Power Failure at the Central Bank (http://www.bbc.co.uk/radio4/news/pip/nb835/)") - a compelling case for not cutting interest rates came from across the Channel, from the veteran public official who is arguably the most respected central banker in the world right now, Jean-Claude Trichet (http://www.ecb.eu/ecb/orga/decisions/html/cvtrichet.en.html).
What he said, with passion and conviction, is that the price of failing to set interest rates at a level that keeps inflation in check would be the rise of mass unemployment that would hurt us for at least a generation.

Or to be more precise, he argued that the current rise in energy and food prices is comparable to the oil-price shock of the early 1970s. And he insisted that the failure of most European economies back then to suffer the short term pain of tighter monetary policy, higher interest rates, led to inflationary wage settlements that undermined economic competitiveness.
"Before 1973 and 1974, there was everywhere in Europe full employment," he told me. "It is after the absence of sufficient lucidity in analysing what was happening after the first oil shock, trying to protect ourselves from the first oil shock and not understanding that we had a real transfer of resources associated with the first oil shock, all that created mass unemployment.

"And we are still fighting against unemployment which is at a level that is not satisfactory in the euro area and which is the legacy of these mistakes in the first oil shock."
Or to put it another way: cut rates and risk long-term, serious damage to all our prosperity.

The commodity-price surge has pushed the rate of consumer price inflation (http://en.wikipedia.org/wiki/Consumer_price_index) in the eurozone well above the formal target of less-than-but-close-to 2%. But high inflation "will not last forever", he said, adding ominously that "we are there to care for it going down."
He argues that even if the sharp rises in energy and food prices represent a one-off realignment, they can't be seen as somehow irrelevant to an assessment of the core rate of inflation, or as immaterial to where interest rates should be set.

What Trichet fears is what he calls "second-round effects", such as wages being set at levels that assume inflation will not fall - which could precipitate endemic inflation, a debilitating virus that would be hard to shake off.

Chatting to Trichet was in some ways strikingly similar to listening to Mervyn King, the Governor of the Bank of England, as he warned last week (yet again) that his fabled NICE era of non-inflationary consistent expansion is well and truly over. As it happens, Trichet has a strong empathetic relationship with the Bank. He said:

"I feel very close myself to the Bank of England. I feel that the Monetary Policy Committee of the Bank of England and the Governing Council of the ECB have very much equivalent analysis on this major point... that we had to have a monetary policy stance which would be designed to deliver price stability."
Or to put it another way: there's not the faintest chance of interest rates falling in the eurozone or the UK for some time (if at all).

The other very striking point made by Trichet is that he rejects any suggestion that the ECB should have an explicit goal of (in his words) "ensuring stability in the price of assets". He said: "it doesn't seem to me possible."

He added: "We will do all we can to delivery price stability and ensure financial stability through the delivery of price stability. But we cannot directly target asset prices. That would probably be something which is impossible, I would say, and not advisable at all."

This matters, because one of the causes of the credit crunch was the rapid and unsustainable rise in asset prices, especially property prices, in the preceding two or three years.

During those bubble years, Trichet was at the forefront of central bankers warning about the dangers of all those trillions of dollars being lent and invested without due regard to the proper risks. He spotted that asset prices were inflating too fast.

But his sounding of the alarm did nothing to stop the bubble expanding to near lethal proportions - such that when it popped, the cost for the financial system and the global economy was very substantial.
Perhaps sensibly Ben Bernanke (http://www.federalreserve.gov/aboutthefed/bios/board/bernanke.htm) - chairman of the US Federal Reserve (http://www.federalreserve.gov/default.htm) - is reviewing (against his own revealed instincts) whether his central bank should intervene more conspicuously when asset prices surge.
M.Trichet implies Mr Bernanke is wasting his time.

Probably better, as many central bankers and regulators now believe, would be to look at whether new rules can be introduced that would raise and lower the capital requirements of relevant financial institutions in a counter-cyclical way - such that their capacity to lend too much too cheaply was constrained in boom years (with the corset being loosened in downturns).
So are we, at the least, over the worst of the credit crunch? The Bank of England recently said there were signs that financial markets are past their nadir.

What is the prognostication of the wily M Trichet, who has had a ringside seat at every international financial crisis since the mid-1980s? Well I pressed him and pressed him, and he pointedly refused to say that the point of maximum danger is behind us.
All he would say is that we are experiencing an "ongoing, very significant market correction."

Which, given his record of calling the credit crunch rather more astutely than the Fed or the Bank of England, isn't conspicuously reassuring.

tobias118118

25th May 2008, 10:24

Chris

Would profit on disposal not signify that there is a possibility that assets are overstated? If they have disposed of the aircraft at the end of their UEL then the profit would signify that assets are overvalued as the depreciation policy is not adequate...

I guess if they were disposed off within the time frame for depn (10 years sounds feasible - either SLB or reducing balance basis) then a profit would be expected but how much?

Anyway, about to embark on your route of an accountant turned pilot but like you concerned of the financial commitment in terms of job availability

Rugbyears

25th May 2008, 10:24

A rather sobering article….

chrisbl

25th May 2008, 17:19

Would profit on disposal not signify that there is a possibility that assets are overstated? If they have disposed of the aircraft at the end of their UEL then the profit would signify that assets are overvalued as the depreciation policy is not adequate...

Quite the reverse. A profit on disposal means the assets have been written down more leaving a book value at less than their market value. In otherwords a conservative depreciation policy (or an idiot prepared to pay more than they are worth).

Re-Heat

25th May 2008, 18:59

---> thread creep

It doesn't matter what depreciation you use, so long as it is consistent. It is not supposed to be the actual cost of the asset, but a proxy charge for that asset each year. Besides, if you analyse various companies between each other, you would look at the EBITDA to eliminate differing deprecation policies.

---> thread creep over

chris-squire

25th May 2008, 21:40

Well I don't think there's ever going to be an ideal time to fork out 60k or more on flight training. For the naysayers above....no I havent been hoodwinked by an FTO glossy mag and no im not some mindless idiot thats blindly cracking on with my training whilst the industry tumbles around me. I know whats going on in the world but as its often said; the decision to fork out this amount of money on persuing our common goal is a very personal one. I cant see things going down the pan quite as much as many of you predict but thats just my opinion.

As for the profit on disposal of fixed assets....if they were overstating their balance sheet then they would be more likely to make a loss on disposal not a profit. If they have understated them then they could easily make a profit if they sell them for the true market value. Anyway, we digress.

Whatever happens....good luck for the coming months folks. Things may get ****ty for a while but they'll pick up again sooner or later.

:ok:

Wee Weasley Welshman

25th May 2008, 23:07

Chris I hear what you say and accept that there never is a perfect time to start training without the aid of a crystal ball.

The thing I wish to convey is simply that based on experience and research I believe I have a part-functioning crystal ball when it comes to pilot recuitment. It spells total famine, war and disease.

I've just finished dinner with a household name estate agent chain owner. Its worse than 1991 and accelerating.

It really is worse this time by a scale factor.

WWW

Wee Weasley Welshman

26th May 2008, 08:26

George Soros in the Telegraph today really spells it out clearly and without caveat:

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/26/cnsoros126.xml

Mr Soros warns Britain is facing its worst economic storm in living memory, dwarfing those of the 1970s and early 1990s, with a housing slump and serious recession.

He said: "The dislocations will be greater [than in the 1970s] because you also have the implications of the house price decline, which you didn't have in the 1970s."

The warning undermines predictions that Britain will suffer only a brief and relatively painless recession, unlike the precipitous dives of previous years.

Mr Soros also warned that the Bank's inflation report represents a "Faustian pact", obliging it to keep interest rates high to control inflation, even as the economy is starting to slump.

"You had the nice decade," he said. "Now that is over and you are in a straitjacket."

Mr Soros made a decent fist of breaking the Bank of England during the ERM crisis and is one of the big boys in the hedge fund world. Doubtless his comment is angled to support his positions. But the comments of Central Bankers are equally couched in secondary interests.

We're going back the 1970's.

WWW

heli_port

26th May 2008, 08:42

http://www.bbc.co.uk/blogs/thereporters/robertpeston/
(http://www.georgesoros.com/)

George Soros (http://www.georgesoros.com/)'s dad had no interest in making money. His priority was the enjoyment of life, after having been a prisoner of war in Siberia during World War I - or so Soros fils says in his romp of a new book about the credit crunch (which has the unprepossessing title The New Paradigm for Financial Markets (http://www.georgesoros.com/crisis08-ftreview-051908)).

When I interviewed the hedge fund pioneer last night, I asked him how and why he acquired his voracious appetite for making money.

"Money counts" he said. It gets you what you want. And if he hadn't made his many billions, he doubted he would have been sitting there being interrogated by me.

Well there's no accounting for taste.

More substantively, Soros has been one of the great philanthropists and political activists of our time - whose voice, thanks to his financial clout, has resonated from the New Europe to not-so-new Washington.
There's also a shambolism about his success and aspirations which is highly engaging.

He doesn't for example deny that his most successful investments have been spawned as much by his backaches - brought on by worry about whether his funds were being astutely invested - as by the application of reason.

The book is a totally compelling, well-ordered stream of consciousness, which - by turns - attempts to demolish neo-classical economics, gives a diary of his recent trading performance, and expounds his own philosophy of social science.

His main argument is that the neoclassical postulate that markets tend to equilibrium is nonsense. He founds this view on what he calls the theory of reflexivity, which broadly says that use of scientific methodology in economics is wholly inappropriate, because economic agents cannot avoid influencing the outcomes they forecast.

Academic economists may sneer. But he has become considerably richer than all of them put together by investing according to his own conviction that markets tend to disequilibrium.

I've written before about how he sees the credit crunch as the end of a 25-year superboom poisonously coupled with the collapse of the US housing bubble.

So I will concentrate here on his current prognostications.
There is of course a problem of his own making in giving weight to these predictions, because he can't dignify them as scientifically accurate forecasts for all the reasons given above.

That said his track record as a money maker means they shouldn't be dismissed out of hand (though some will be uneasy that he talks his own trading positions). In 2007, when he took active control of his funds for the first time in years and put his money where his mouth is, he made a return of more 30% (which is no slouch for someone who says that at the age of 77 he doesn't really know how to use the full gamut of modern financial products and techniques).

Here are a smattering of his views:
1) The US is in for a longer and deeper recession than most professional forecasters expect - and that will ultimately lead to a further weakening in the dollar.

2) Prospects for the UK are poor, because of the fragility of our housing market, our personal indebtedness and our dependence on a financial services sector that is heading for bad times. He fears we could be in a worse mess than the US.

3) The longer-term outlook for China is very uncertain. And he would not be surprised if the developing bubble in Chinese markets ended in a financial crisis, though he thinks such a crisis won't happen for a few years yet (if at all).

So the years of onwards and upwards may be behind us. Which may be a shame for those of us yet to make our first billion (unless we're planning to short more-or-less everything outside of Asia and the Middle East).

heli_port

26th May 2008, 08:48

http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article4004371.ece

Airlines are being forced to pay cash in advance for jet fuel as the major oil companies tighten the screws on an industry that is being crushed by an extraordinary surge in the price of crude oil.

Sources within the airline industry indicate that credit is being denied to most of the leading American carriers and the practice is moving to Europe and Asia. So uncertain is the cash solvency of the industry that jet fuel suppliers insist on prepayments into special bank accounts.

A credit controller at a leading European multinational oil company told The Times that the oil industry was moving to jet fuel prepayment. “It’s common in the US and it is moving to Europe. We have been moving to prepayment since Swissair went bust.”

The need to put up money before delivery of fuel is a huge financial burden that has been shifted from the oil companies to the airlines. According to John Armbrust, a US jet fuel consultant, the oil industry had $5 billion (£2.5 billion) of jet fuel credit outstanding to airlines before the 9/11 terrorist attacks. Now they are demanding that airlines leave cash on deposit.

“The airlines can’t afford it. Traditionally, oil companies extended credit for 14 or 21 days and some as long as 30 days. Now, most American airlines are on prepay. South West is one of a few likely to still get credit.”
The extent of the cash squeeze was highlighted last week when American Airlines said that it would charge $15 per bag checked even as it revealed plans to shed 75 aircraft, shrinking the airline’s capacity by 12 per cent.
The price of jet fuel has risen by 60 per cent since January and American Airlines paid $665 million more for fuel in the first quarter of this year than in the same period of 2007.

The credit crunch is likely to worsen and a number of financial institutions will fail, according to research from Atradius, the credit insurance group which conducted a global survey of its customers’ views of the financial outlook. Although Atradius said that companies expect the number of failures to be small, about 65 per cent expect there to be failures.

The group added that direct exposure to sub-prime lending is higher in Europe than in the United States even though the bulk of the sub-prime mortgage defaults are in the US and many of the securities these loans are packaged into would have originated from US-based mortgage companies.
“Some explanation for this may be investments by European companies in US securities offering higher returns and more frequent use of secondary financial markets to securitise receivables by European countries,” it said.
Atradius added that only 12 per cent of companies across the world do not expect an economic slowdown in the next year. In Britain, more than 90 per cent of companies surveyed expect a slowdown, the highest percentage. About one in six companies expects a slowdown of only the national economy; a quarter expect a slowdown of the global economy and half expect a slowdown of both. The expectation of a slowdown is also high in Mexico, the United States, Spain, Italy, France and Belgium and lowest in Sweden and the Netherlands.

Atradius found that larger companies are more likely to have been affected by the credit crisis. Although fewer than 30 per cent of small companies reported an impact, almost half of all large companies (with more than €1 billion annual gross sales) said that they had felt the credit-crisis pinch.
Companies operating within the energy industry have been especially affected, but those in the healthcare and services industries reported a relatively low frequency of impact.

Re-Heat

27th May 2008, 09:39

Squealing for deals - FT.com
Published: May 26 2008 20:39 | Last updated: May 27 2008 09:54

The price of crude oil has risen 80 per cent during the past year. The cost of jet fuel has risen even faster. Airlines across the globe are squealing. Air France on Thursday posted its first quarterly loss since 2003, due mainly to higher fuel costs. American Airlines has announced it will cut routes and staff. Airlines have no control over fuel prices – but they can decide the best response. Consolidation should top the list.

Take Europe’s airlines. They are being squeezed by fuel prices as demand is weakening and wages are rising. Meanwhile, European long-haul capacity will grow in 2008 for the first time this decade. These pressures are exacerbated by the industry’s history. Most countries still have national airlines. Yet the market is now regional, making combinations necessary.

The business case for such mergers is impeccable, with significant cost-saving opportunities. Whether they will happen will depend not just on companies’ boards but on overcoming regulatory, legal and political hurdles. Alitalia, losing nearly €1.5m a day, has been able to resist a takeover by Air France-KLM thanks to support from the Italian government. Politics aside, regulators might justifiably frown on airline combinations that would dominate routes or important hub airports. The hurdles, though, are falling.

The European Union-US “open skies” agreement, effective from March, opens transatlantic routes to greater competition. And the financial rewards from airline mergers – historically poor – now provide more encouragement. When Air France joined forces with KLM in 2004, annual synergies of up to €500m were promised. So far it has delivered double that.

Which European airline mergers might work

Potential combination Combined mkt cap(€bn) For Against

Air France-KLM / Lufthansa 12 Majority of slots at 5 of Europe’s largest airports. Complementary routes. Labour/buying synergies High market share at hub airports. Different working practices. AF partly government owned

Lufthansa / BA 10 Lufthansa’s strong balance sheet. Diversifies BA from US and Lufthansa towards US High market share at Heathrow

AF-KLM / BA 8 Would be Europe’s largest carrier. Majority of slots at 3 of Europe’s largest airports. High synergies High market share at hub airports. AF partly government owned. Different working practices

Lufthansa / SAS 8 Affordable SAS to provide traffic for Lufthansa’s German hubs. High synergies High share on Germany-Scandinavia routes. SAS needs restructuring. Both unionised but working practices different

British Airways / Iberia 5 BA already has stake. Strong transatlantic market share. Iberia’s strong balance sheet High route overlap on London-Spain and transatlantic. British Airways’ pensions/unions

balhambob

27th May 2008, 11:03

Wee Willy Welshman,

I know of loads of people getting jobs

You need to look on the bright side and stop depressing everyone you doom and gloom merchant

heli_port

27th May 2008, 11:13

Wee Willy Welshman,

I know of loads of people getting jobs

You need to look on the bright side and stop depressing everyone you doom and gloom merchant

I think his posts have been rather reflective of what is happening within the industry and in the wider world. You are correct in that it's not all doom and gloom (a few friends of mine from OAA/FTE just got jobs) but we are expeiencing a major correction. Ah well Balham i suppose you can always go back to the world of accounting :}

Wee Weasley Welshman

27th May 2008, 11:29

What may depress you may save another wannabe from commiting financial suicide.

Its a little bit like the Theatre is on fire but everyone is chattering about price of the ice creams through the thickening smoke. Airline Bosses, economists, industry analysts and the likes of me are telling you that airlines, signicant ones, here, will go bust or cease operations soon. When that happens nobody wants to know about anyone who doesn't have 1,500hrs on a commercial type because they've already got a stack of CV's with more than that who can start tomorrow on half pay.

Unless you really know, have studied and talked about the 1991 -1993 airline recession you have no idea how brutal this business can be.

People will be getting jobs and ordering new aircraft right up to the day before the bust. Then it all gets thrown into high speed reverse.

A recession, a house price crash AND an oil shock is truly a witches brew that will kill off several airlines.

WWW

Wee Weasley Welshman

27th May 2008, 11:34

Actually to be fair there are brighter aspects to the situation at present. Namely the immense amount of expansion in the BRIC countries and the Gulf region. They are falling over themselves to offer contracting work and are improving their T&C's to attract experienced pilots to their lands.

Although many would be reluctant to make the ex-pat move most would have to if redundant and this may ease the pressure on the jobs market at home a little. Although I expect the airlines here to lower T&C's and ask you to fly for free or for meal vouchers if its your first job.

WWW

Tamar217

27th May 2008, 14:19

hollingworthp

27th May 2008, 14:59

Can you imagine the day where you jump off the 737 in Spain for your holiday and find the captain serving you drinks at the hotel bar to make a few extra quid, because the airline pays only pays him in meal vouchers!

Looks like its here already - in fact it is worse, This post HERE (http://www.pprune.org/forums/showthread.php?t=328215) is where you can find out about paying for your Type Rating AND your line training with EasyJet. Interesting way for the LCC's to fund their fuel, get the crew to pay for it ;)

balhambob

27th May 2008, 18:34

Its a little bit like the Theatre is on fire but everyone is chattering about price of the ice creams through the thickening smoke. Airline Bosses, economists, industry analysts and the likes of me are telling you that airlines, signicant ones, here, will go bust or cease operations soon. When that happens nobody wants to know about anyone who doesn't have 1,500hrs on a commercial type because they've already got a stack of CV's with more than that who can start tomorrow on half pay.

My humble opinion is that this is an overexaggeration on your part.

You might find that the theatre being 'on fire' is abit of a false alarm. Your probably better off sitting back, slurping on your ice-cream and enjoying the film whilst the other panic stricken punters leave!

All we hear from the media is Oil Prices, Housing Crash (thats being going on for about since I can remember) and Recession. It sells papers.

Ive no doubt the UK population has been spending like crazy over the last 10 years due to the willingness of credit institutions to lend. The purse strings will have to tighten and this will have an knock on effect to the emerging economies that have been supplying us with our goods. BUT I doubt the effects will be as strong as the scaremongers will say. I can see a correction in house prices but the same will happen with oil (there is no lack of supply - the price is just as overinflated as the housing market).

WWW - I just dont think the picture is as bad as you imagine

Its always a gamble to go into this industry and frankly when is a good time? Who knows what is round the corner (no one predicted 9/11). All I know is that if you sit back worrying all the time you will get nowhere!

helimutt

27th May 2008, 18:45

BalhamBob, I'm in total agreement with WWW on this one and yes, I think everyone has their own views on how this will all pan out in the end. My feeling is that the housing market blow, plus high oil prices, plus recession is very real and not some media stunt to sell more papers/airtime. If you think that way then that's your view, and i'm sure there are many more.

Best thing is to sit back, prepare for the worst and watch what happens over the next 6-12 months.

WWW isn't trying to say DON'T TRAIN TO BE A PILOT UNDER ANY CIRCUMSTANCES, but sitting back a while may just help those on a very tight budget to better sort finances for when the economy does improve, if it ever does again, and the industry goes on another up turn.

My gut feeling is it's going to get a lot worse before it gets better.

I hope i'm wrong because it effects everyone somehow, especially us low paid sector workers. This isn't the forum for arguments, but balanced debate and valid points do help those who are maybe entering this industry with little-to-no knowledge about it all. There are a lot of naive people coming along all of the time and being taken for a ride.

(eg, the guy who was told it would cost him all 16k is one)

camel toe

27th May 2008, 18:50

WWW

in that part operational crystal ball, how long in your opinion should we all duck for cover for? 6 months, 12 months, 2 years?

Cheers

Artie Fufkin

27th May 2008, 19:09

You might find that the theatre being 'on fire' is abit of a false alarm. Your probably better off sitting back, slurping on your ice-cream and enjoying the film whilst the other panic stricken punters leave!To continue the metaphor, imagine the news report after the fire;

"One or two punters decided to continue watching the film and were burned to death despite the fire alarm ringing for several minutes before the fire hit the auditorium. Investigators puzzled why they stayed in their seats"

Re-Heat

27th May 2008, 19:13

2 years I say.

Read this - from the FT again (today):

US house prices plunged by a record amount in the first three months of this year compared with the first quarter of 2007, a trend that could prolong the economic slowdown and cause further pain for homeowners facing foreclosure, a new report revealed on Tuesday.

Meanwhile, rising petrol prices and a weakening labour market sent consumer confidence sliding to a 16-year low.

The S&P/Case-Shiller national house price index, which covers about three-quarters of the country, was 14.1 per cent lower in the first quarter of 2008 than for the same period a year earlier, the sharpest drop in the 20-year history of the index.

Wee Weasley Welshman

27th May 2008, 19:34

2 years for the recession and HPC. Flat for 2 years after. Good time to be a Wannabe job hunting might be 2012. That said the crystal ball is on the blink at the moment so don't bet the farm on anything I say.

The last HPC and recession ran from 1990 to 1994. By 1996 house price inflation reappeared and airlines started expanding once again, Ryanair started up with easyJet the year after and then we had an 11yr long boom.

The current situation is that the oil pressure is dropping into the caution zone, the temps are approaching the red line. There is a funny smell in the cabin and the master caution has just illuminated. If you want to keep reading the paper then fine - you do that. Me, I'm pulling out the plates for the nearest suitable and switching on the seatbelts.

Personally I have little to fear and as I sold to rent a year ago I'm profiting from the current housing crash. I'm whistling.

Its wannabes that face the emergency.

Some resent being warned.

Fine,

WWW

balhambob

27th May 2008, 23:12

It seems like we have all turned into Economists judging by the last few posts!

Got to get back to the Theatre debate tho:

"One or two punters decided to continue watching the film and were burned to death despite the fire alarm ringing for several minutes before the fire hit the auditorium. Investigators puzzled why they stayed in their seats"

"Several punters ran out of the auditorium only to discover they had made the wrong decision and it was snowing outside. They tried to get back in through the door they had left by but discovered it was now shut. They did not have enough money to pay the bus home but fortunately for them they secured an interview with Ronald Mcdonald. They now have a great time selling Happy Meals and flying Radio Controlled aeroplanes at the weekend"

Seriously though I dont see the point in delaying things because you are worried about the way the industry is going. The quicker you get on the bus the quicker you get to your destination.

There are plenty of jobs about and the industry is absolutely crying out for Flying Instructors due to a mass shortage. That is a FACT - just have a look in Flight International's back pages. No point in waiting - just bide your time until it gets better? Thats as bigger gamble as taking the plunge now. Ridiculous - you may well regret it (unless you like working with Ronald)

Personally I have little to fear and as I sold to rent a year ago I'm profiting from the current housing crash. I'm whistling.

Well done??? What you got your money in? Pork Bellys or Northern Rock? I kept onto my place and rent. If there is a major Housing Crash it will be much easier to upgrade to something better (& cheaper) if you are still a house owner - I think you have made one hell of a gamble.

Anyways good luck to you all

I say the cup is half full

nich-av

28th May 2008, 00:14

There are plenty of jobs about and the industry is absolutely crying out for Flying Instructors due to a mass shortage. That is a FACT - just have a look in Flight International's back pages.

True but there's a shortage of good, experienced instructors, not CPL/IR/ME's just upgrading to FI, coming in, bagging hours and going out...

Proof? I don't see any ad saying that they would sponsor your FI course...

The best and longest-lasting instructors are found among airline pilots, certainly not among younger fATPL's who come on hour building and start shaking when giving their first ground lessons... they never last longer than a year and every 2 or 3 months one of them leaves for a better horizon. So flight schools genereally try to avoid them because it costs money and energy to look for replacement eacht time one leaves.

I wouldn't count too much on instructor shortages. There's plenty of experienced airline pilots out there willing to teach for the right money.

heli_port

28th May 2008, 06:36

No point in waiting - just bide your time until it gets better? Thats as bigger gamble as taking the plunge now. Ridiculous - you may well regret it (unless you like working with Ronald)

Agreed that's why i'm diving right in. I have talked to allot of my friends in the city and they all have a different opinion about how low it's really going to go :}

Wee Weasley Welshman

28th May 2008, 08:34

You guys are aware that your ATPL exams and your IR expire aren't you?

The massive problem with completing your flying training into the face of a major airline recession is that of currency. If you can't find work in the first 6 months then you will get rusty as hell. All the time the school is churning out identically qualified new pilot wannabes behind you who are more current. After 12 months you need to revalidate that Multi IR. Don't expect to do it in minimum time if you've barely flown in the last 12 months. Affording to fly to keep current is a major problem for many as they are now servicing the debt from their basic training.

You have attained your flying skills in a short time. This means they will decay quickly. Within a year or two you'll struggle to pass the simcheck assessment when you do get past your first job interview.

At some point the constant rejection and lack of likely job leads starts to crush your morale. You need to get on with your life, the partner wants a better flat, you go back to your old career to make ends meet. Eventually you can't face throwing more money keeping you IR current and you let it lapse. Game over.

Seen it many many times.

There are plenty of other people in this business who will tell you that timing is everything. Complete training in a boom and its an immediate Jet type rating and straight into an expanding airline. Joy. Complete training into a bust and see above.

Please tell me you've considered these sorts of issues.

WWW

heli_port

28th May 2008, 08:51

A and C

28th May 2008, 12:42

You never miss the chance to point out the down side to a situation. This time it is the cost of IR renwals and ATPL exams expiring.

The minor problems with the economy at the moment are made much worse by people like you are talking us into trouble because you undermine confidence in the future, it is interesting to note that you have decided to use the house price fall for a little speculation and so would no doubt like to see a big crash in the house market for reasons of personal proffit.

When I say that "low service" airlines are likely to suffer the worst of this downturn you accuse me of "willy wagalling" and just stick your head in the sand, perhaps because you work for one of these "low service" airlines and just cant face the fact that you may be talking yourself out of a job.

The economy needs cash flow and with all this talk of economic gloom people are not buying hoses, cars and other things not because they don,t want or don,t have the money but because they are frightened by the hype in the press that is likely to become self forefilling.

Only time will tell if you are right about the economic situation but consider this, the housing market is dead at the moment because people won,t sell at the low prices the estate agents need to keep the market moving and with inflation increasing, the value of your house speculation pot is decreasing in real terms. All that is needed is a big lay off at your "low service" airline and your get rich quick plans will come crashing down around your ears.

You may think that this post is a bit harsh but you are trying to speculate from others misfortune in the house market and at the same time talking down the pilot market to a point that when things turn around you will be in the position to proffit from a pilot shortage that might result.

geordiejet

28th May 2008, 13:54

A and C - you really seem to have it in for the LCCs. Did you have a bad experience with one of them? Or is flying with them simply below you?

Would now be a good time to point out that a "full service" airline has just announced a 10% reduction in capacity? Yes the "low service" airline Ryanair has also announced grounding a portion of it's fleet means that these problems are not for the "low service airlines". Qantas, also a "full service" airline is reducing capacity, as is AA and NZ have reduced capacity to the UK by 7%.

If these airlines are so doomed, then the UK is in trouble, as we only have 1 (and a half "full service" airlines [the half is BD - depending on which route you fly]) based here.

And beleive me - when people do tighten the purse strings, a "free" drink and a soggy sandwhich will not tempt people on your planes. Instead, low fares and a safe, reliable (believe me, I see one of the "full service" airlines which serve NCL as far from reliable) service are what people will go for.

boogie-nicey

28th May 2008, 14:17

I'm with WWW on this and agree that presently we are in a very dire situation indeed and the future seems to just as bleak.

If you really feel that you must start your training then take it easy and "spend it as you earn" after all you have time in hand. If you can return to that well paid career of yours then do so and fly on the weekends, at least financially there will be some degree of security. Flight training at best is a roulette wheel gamble but in the present climate I'd say the odds are very much against you, come on smell the coffee and snap out of it ;). If you're young then perhaps you can wait and do something else in the meantime, we all know the economic bad weather CBs won't last forever. Considering that someone previously stated that it'll be 2 years before the green shoots of recovery appear then you only need to wait 9 or so months before starting the training so you graduate during the upturn. That really isn't too long is it and besides gives you extra time to get a bit more financial padding underneath you. Give your brain a chance and curtail the passion for once. Poverty is no fun post training especially when you've playe all your ace cards and still have nothing to show for it. It's easy to make rash decisions on a full stomach but that's just arrogance. Be careful it's alot of money, it's your future and that of your FAMILIES too. Be wise and cautious, sometimes dull and boring in life will help win the race in the end.... it's upto you my friends:hmm:

I'm sure there are jobs out there, there always will be but at what price? If you do get lucky and gain employment your low wages and increased training (self funded Type Rating) will mean hardship for a few extra years. Whereas well timed training into a 'good' market will supply you a better level of salary against a smaller initial training cost, this will reduce the hardship simply because of timing and you'll get a lot more out of it. Factor into this the money you were earning whilst for your training to start means you're onto a winner.

Another point.... People are relating this housing price crash with that one, this one, back then, from that country, etc .... But remember to factor in the change of political inclination since it last occured. We have a socialist government in this country (UK) that are even themselves beginning to wipe the sleep out of their eyes after awakening from their "money no object party from the night before". They have begun to worry about the true extent of just how bare the government cupboards are and even that of the population, i.e. where's the money going to come from to oil the economy? Last time around the government was able to plan the solution and just had to wait for it to get going again, this time things are different. Another knock or two would put us in a very serious situation indeed. Society is held and bound together so when something is depressed at one point the entire area becomes depressed by that action. With a government now desperate for whatever meat is left on the bone they'll soon start tapping into aviation as one of the few bread winners of the economy and burden airlines more and more. Then the prospect of the wannabe will be far from an airline manager's perspective. WWW has warned you clearly and backed up his claims to reinforce that point. Bad news is part of life and it can only be dressed up in so many ways before people just stop warning altogether. Considering the negative status of our economy and it's outlook, if the present circumstances aren't a sign asking you not to train - or simply go/slow then what kind of signals are you looking for...? Loch Ness monster emerging from the water and begin it's long journey to Maul the inhabitants of London? :p

If you're young enough go to the armed services and get them to pay for your training, they even give you a job afterwards! As prospect professionals you really need to be seen to make rational and common sense decisions. It's not something that goes onto your CV but evident in your character at interview.

I hear that the economic downturn in New York is so bad that even the Mafia's had to lay off 3 Supreme Court Judges :p:p:p

Hang in their folks..... we have little other choice. ;)

heli_port

28th May 2008, 17:41

If you really feel that you must start your training then take it easy and "spend it as you earn" after all you have time in hand. If you can return to that well paid career of yours then do so and fly on the weekends, at least financially there will be some degree of security.

No can do boogey, i've paid my deposit to OAA and the train is leaving in december. I'll graduate in mid 2010 and if their are jobs fantastic if not i will return to my previous profession and fly at weekends as you have suggested ;)

heli_port is on his way, watch out :}

helimutt

28th May 2008, 21:24

heli_port, not sure if you're going rotary or fixed wing, but please do come back and tell us what happens in 12 months time. Just from an interest point of view to see how wrong we all were.

Good luck.

heli_port

28th May 2008, 21:29

i'm going fixed wing m8 ;)

eikido

29th May 2008, 08:30

Does anyone know what is happening to Boeing's and Airbus's full order book? Don't you guys think airlines would've dropped orders by now if they know the economy is going way down?

Eikido

Re-Heat

29th May 2008, 09:14

And on cue, the order cancellations are starting...just as they did in 1991/1992:

Oil price forces Qantas to cut routes
By Peter Smith in Sydney

Published: May 28 2008 12:34 | Last updated: May 28 2008 16:01

Qantas on Wednesday warned that escalating oil prices would increase its fuel bill by more than A$2bn in its next financial year, forcing the airline to abandon some routes and cut jobs in an effort to rein in costs.

The Australian carrier, one of the world’s most profitable airlines, joins a growing list of companies around the world that are struggling under the weight of higher oil prices. Jet fuel prices have more than doubled in the last year and were on Wednesday trading at around $1,345 per tonne.

Air New Zealand warned on Wednesday of a drop of at least 25 per cent in full-year earnings thanks to higher fuel charges. Shares in the 80-per cent government owned carrier fell heavily and are down by close to two-thirds in a year.

Geoff Dixon, Qantas chief executive, said fuel now represented close to 35 per cent of the airline’s total expenditure. “The fact is that fuel prices are something we have no control over, so we have to look harder at areas where we do have control.”

“Despite our fuel hedging strategy, fuel surcharges, two separate across-the-board fare increases and a recruitment freeze, we are not bridging the widening gap between the actual increase in the cost of fuel and the amount we offset,” he said.

Qantas said cost saving measures would include the cancellation of 5 per cent of available seat kilometres – the equivalent of grounding six aircraft – which would hit international and domestic services.

Qantas said it would ground at least three aircraft, accelerate the retirement of four others and cancel the delivery of an aircraft for Jetstar, the airline’s budget brand.

Mr Dixon said Qantas remained a strong company with a good balance sheet and that it was committed to A$35bn of aircraft orders, one of the largest programmes in the world.

“We must make these hard decisions now, however, if we are to ensure the ongoing strength of Qantas, preserve the jobs of the vast majority of our current workforce, and position ourselves for growth when the trading environment improves.”

Qantas said it would reduce staff numbers and had launched an “accelerated leave” programme to mitigate the requirement for redundancies.

“In the first instance, redundancies will be carried out on a voluntary basis.” Mr Dixon said, adding pay for the company’s senior executive group would be frozen.
Copyright The Financial Times Limited 2008

Wee Weasley Welshman

29th May 2008, 10:33

Shockingly powerful evidence today in the form of the Nationwide house price survey. Worst falls since they started recording data 17 years ago.

House prices down 7.4% since Sept (9 months) which exceeds the worst 12 month falls of 6.3% in the 1992 house price crash.. The June figures are likely to be as bad or worse as the seasonal adjustment for June is a lot more negative than in May. Even a flat price sales figure will be over 1% down due to seasonal adjustment alone next month.

This is a now a full speed house price crash of at least the size of the 1992 crash and probably worse.

What Wannabes need to know is that a house price crash ALWAYS results in a recession. A recession ALWAYS results in airlines going bust. Airlines going bust ALWAYS means a total drought of jobs for Wannabes. Its easy to understand the linkages.

The difficult thing for Wannabes to do is to ignore the backward looking data and to consider the position in the near future - when they will be job hunting. The current order books for aircraft reflect the state of the business 2 years ago. Current recruiting is as a result of routes opened or expanded following meetings in the Spring of 2007. Holidays and trips taken for leisure were committed to many months ago or last year. Airlines profits are being reported from operations made mostly in 2007. Many of them have hedged fuel positions well below current oil prices but those hedges expire soon.

All that backward looking data can give an impression that there really isn't a big problem.

Unfortunately the forward looking data is all dire, it is diverse and it is intractable. You just can't fix a credit crisis, a house price crash, a recession and a global shift in resource demand plus a baby boom retirement bulge and a totally bare fiscal cupboard WITHOUT a massive amount of unemployment OR hyperinflation OR large scale war.

Train slowly and cheaply and keep working so as to keep your debt low. If you can dispose of any assets you may have to that personal insolvency can provide a safety-net as painlessly as possible. Don't pay anything up front to a training school and make sure all your family and loved ones know that finding a job might take years of commitment and require moving many times and over great distances.

And most of all - don't believe the unbelievable spin still being pumped out by increasingly nervous schools about pilot shortages!

WWW

ps

A&C Wrote:

Only time will tell if you are right about the economic situation but consider this, the housing market is dead at the moment because people won,t sell at the low prices the estate agents need to keep the market moving and with inflation increasing, the value of your house speculation pot is decreasing in real terms.

Given my equity in the bank is going up by 4.1% net and the next house I buy is going down by that every two months I'm fairly comfortable with the real return on my STR strategy. Thanks.

kj990

29th May 2008, 13:19

WWW,

Mass unemployment & hyperinflation i can get my head around, 99.9% of what you've posted to now i can agree with.

What's the 'big war' bit? Is it the build up of the military that produces 'growth', or does it destroy inflation/debt etc... or maybe stealing all the oil :eek:

Ta.

MarcoFF

29th May 2008, 14:46

This is surely a big issue to wannabes, but more greater to them who are just finished, or about to finish their training.

Should start to think when this downturn comes to an end, to find a good time to do the training.

In Finland not really big signs of recession, just a little bit house prices down. Anyways our analysist say Finland will do fine, not certainly like beginning of 90's!

heli_port

29th May 2008, 18:01

British Airways has said it will increase its fuel surcharges on all tickets issued from Tuesday, 3 June as it looks to offset rising oil prices.

The surcharge for short-haul flights will rise by £3 per flight to £16 per flight, or £32 for a return ticket.

Long-haul flights of less than nine hours will increase by £15 per flight to £78 per flight.

The surcharge for long-haul flights of more than nine hours will rise by £30 per flight to £109 per flight.

BA added that it would also increase its fuel surcharges by similar levels in markets outside the UK.

Earlier this month, BA reported a 45% rise in profits to £883m for the year to 31 March.

However, at the same time, the airline warned that the current financial year would be tough because of the soaring cost of jet fuel.
It said at the time that if oil remained at its then market price of $120 a barrel, BA's total fuel costs would rise by about £1bn in the current financial year.

The price of oil hit a record high of more than $135 a barrel last week and is currently trading around the $130-a-barrel mark.

Revenue measures

Separately, Spanish airline Iberia said that it was dropping its bid for fellow airline Spanair.

The move came soon after Iberia's chairman said it was rethinking its stance on the offer because of difficulties facing the sector.

And the International Air Transport Association (IATA) warned that the airline industry faced a "grim" outlook, saying that passenger numbers would be dented by soaring fuel costs and economic turmoil.
The number of airline passengers grew by 3% in April from 5.4% in the same month the previous year, it said.

And for the first four months of 2007 the year, growth was 5.6%, as against 6.7% the previous year.

Besides fuel surcharges, airlines have begun taking measures to try and boost revenue.

Last week, American Airlines said it would become the first major US carrier to charge passengers to check in a first bag.

http://news.bbc.co.uk/1/hi/business/7425631.stm

potkettleblack

29th May 2008, 18:01

Wannabes would bode well to read the Terms and Endearment forum in addition to these, in particular the thread running about the latest EZ scheme. It will give you a good feel for what our beloved managers have in store for us.

Rumour also that FR is asking for F/O's to volunteer to take unpaid leave. So after you have paid them to train you might then not be able to build your hours to move on and you will still have the debt to service. Having said that they intend to continue recruiting of course as its a profitable venture, at the trainees expense of course.

hollingworthp

29th May 2008, 19:28

MarcoFF - Finland is not a closed community so if an airline goes bust elsewhere in Europe, those experienced pilots may well choose to move to Finland to take the jobs there which will leave low-hours pilots a little less desirable.

kippax

29th May 2008, 23:27

Good reading from WWW and others

Qantas did advise slowing down operations, but also indicated they would look to more fuel efficient acft for future needs (of which some are already on order) and are stopping old gas drinking machines

Old acft with high fuel burns, will kill airlines if the oil price increases. They are signs two airlines in the UK may fall over before the summer season is out

For people with money in the bank, I would say go for it, but those who need to lend serious amounts of cash be aware - The RBS sent a letter out to Shareholders asking for cash and HSBC etc are behind them

Pax loads so far have been good, with people cutting back on everything else but their summer holiday

True airlines will suffer, but they have been mergers i.e TCX & MYT, TUI & FCA and this will become the trend I have no doubt

I have been involved in aviation now for some years and there is always worry and stress but thats aviation;)

KP

heli_port

30th May 2008, 05:51

The RBS sent a letter out to Shareholders asking for cash and HSBC etc are behind them

You are referring to the rights issue. Yes RBS, HBOS got into a bit of bother and everyone agrees that barclays needs an injection of cash however having spent the last few years auditing HSBC accounts i can assure you they don't.

They are signs two airlines in the UK may fall over before the summer season is out

Please name the airlines in question!? :p

A and C

30th May 2008, 06:18

Geordiejet

I don't have a problem with the low cost sector at all but what I do have is a problem with the way that the market sees them, the way that they keep the prices low is by offering a very low level of service.
When all is going well this is not a problem but if they cancel a flight you can expect no help whatsoever from the airline.
The fact of the matter is that just at the time when you need help the airline will offer you nothing. If you buy wisely you can usualy get a deal with one of the full service airlines at a price that is very near the "low cost" price and get to an airport that is not 60KM from the city that you wish to visit.

As I say at the top of the page Low cost = low service and the public needs to have that in mind when they buy a ticket.

WWW

The big problem with the UK house market according to an estate agent that I know is that he can't get anything to market, people are not willing to sell there house for the price that the market thinks the house is worth. This has had the result that there is a very low volume of sales and the houses that are selling are of very low quality or "forced sales". fortunatly for my contact he is a reputable agent that offers a wide range of property services but says that if he was relient on just sales he would be shutting the shop right now.
The question that only time will answer is how will the real market and your "cut and paste" view of things stack up over time?

Mikehotel152

30th May 2008, 07:41

:rolleyes:

When house prices were rising year on year, out of all proportion to wages; when property owners were taking out loans secured on the equity 'created' by those absurd rises on a regular basis to buy cars/holidays/conservatories they couldn't otherwise afford; when people were buying second homes with their 'spare' equity; where was the media and people like WWW warning people that the house-rises were artificial and the flipside of 'releasing your equity' was higher monthly repayments!?

It really annoys me to hear all the 'whoa is me' bleating about house-prices falls. Easy come, easy go!!! Personally I think it would be fair for house prices to fall substantially, so that they bear some relation to wages. I'll finally be able to afford something decent!

The credit crunch is simply part of this same issue. You don't need to be an economist like WWW to figure it out: You take out a loan; you pay it back. The bank charges interest and you repay the loan in instalments. It costs you a lot of money. That's why our parent's generation saved up for things they wanted to own. One of the major causes of the 'credit crunch' is that the media and gullable public have created the trap of buy now pay later. Why are people so surprised that we're in this position? I predicted it years ago...

When you link this irresponsible behaviour by certain people with rising house prices, you have a problem for those people. It really annoys me that people who didn't fall for this :mad: will suffer in a recession because the rich kids working in the City of London jumped on the bandwagon and are now panicking because their bonuses are sliding down the plug hole. These City-Slickers, who have earned fortunes gambling with other people's money, are now unwilling to gamble. Shame, poor dears won't get their new Porsche this year, and the rest of us lose out. Add into this unsavoury mix a lot of greedy oil-barons and rising oil prices, a government that thinks little of spending billions on needless wars and paying people not to work, and you get an almighty mess.

The above rant is why I cannot understand 18 year olds signing up for integrated courses to become airline pilots. In the current economic climate it's crazy if it's your own money, irresponsible if it's not. :ugh:

kippax

30th May 2008, 08:05

MarcoFF

30th May 2008, 08:25

hollingworthp, surely isnt closed community, but i doubt very much there is many experienced pilots outside of the Finland who are able to speak one of the hardest languages in the world:ok:
Which our two biggest airlines require.

Re-Heat

30th May 2008, 08:29

Silverjet has ceased operations today.

bjkeates

30th May 2008, 09:20

This is going off-topic, but A&C's comments have irked me somewhat.

As I say at the top of the page Low cost = low service and the public needs to have that in mind when they buy a ticket.

They do. Before they can purchase a ticket they have to tick a little box which says they've read the terms and conditions attached to that ticket. If your flight is cancelled and you need help (at least financially), then you'll have travel insurance to fall back on... right? :)

Yes, prices are kept low by keeping costs low, which means not giving a free sandwich and drink on board. Big deal. If you don't like it, book with someone else!

Back on topic, it's a bit worrying to see the Silverjet news today, although I suspect they were always going to be one of the first to go (relatively new, relatively small customer base, obviously not much spare cash). Let's hope they can find the investment they need to get going again, although it would take someone very brave to invest in a grounded airline with oil prices rising seemingly exponentially and a recession on the horizon.

heli_port

30th May 2008, 09:24

Look at the news today there's one............:p:p

I am a shareholder of the RBS so, yes I was talking about the rights issue

Going back to my original statement, more airlines will join forces in order to continue as a going concern

KP

Your original statement included HSBC! don't make statements like that unless you have facts backing them up and the other airline would be?

heli_port

30th May 2008, 09:26

Silverjet, the business class-only airline, this morning admitted it no longer had the cash to continue flying and suspended operations.
The airline, which has only been in operation since last year, is the latest to fall victim to soaring jet fuel prices.
"It is with deep regret that the board of Silverjet has therefore decided that it must suspend operations with immediate effect," it said.
The last flight took off at 7.30 this morning from Luton on its way to Dubai.

Last night Silverjet said that its would-be Abu Dhabi investor Viceroy had still failed to provide it with the $5 million cash loan it had promised under a rescue deal and that it was left talking to just one potential rescue investor.
This morning it added: "Silverjet continues to be in discussions with investors interested in supporting the business, however, it has yet to conclude such discussions to its satisfaction."
The advance was required as a matter of urgency since its working capital reserves were limited. It is understood it did not have enough cash to pay for the fuel for any more flights.
A spokeswoman said she believed founding chief executive Lawrence Hunt was still talking to the investor, but agreed that the future looked bleak now the airline has no income coming in.
It employs some 330 people in Luton. Silverjet said customers who have booked flights via credit card should be able to receive money back from their credit card company or from their travel agent. But others are unlikely to get their money back.
A week ago Silverjet's shares were suspended when the airline revealed that Viceroy was not handing over the cash which it needed urgently to keep flying. At the time the airline confirmed that it remained in talks with one party which was interested in investing in the company.
The Luton-based carrier, which offers business-class flights to New York and Dubai for about one third of the price of a British Airways ticket, said last year that it was losing about £1 million a month. This figure is rumoured to have doubled in recent months. Silverjet's share price has fallen from 120p at flotation to 13½p before its stock was suspended.

http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article4031323.ece

geordiejet

30th May 2008, 09:35

The fact of the matter is that just at the time when you need help the airline will offer you nothing. If you buy wisely you can usualy get a deal with one of the full service airlines at a price that is very near the "low cost" price and get to an airport that is not 60KM from the city that you wish to visit..

Depends who you use. A majority of easyJet, BMIBaby and Jet2 flights use 'mainline' airports.

And having to camp out on the floor of T5 for several days is what I would describe as 'no help whatsoever', not to metion the many thousands of missing bags that have yet to be found.

So low cost does not mean low service. It is freedom to choose to pay for the things you want and need. E.g. not paying for a bag if you are not checking it it, not paying for food. If you want your G+T you buy it. You also get a much better selection of food. It means an extensive route network, with regular flights. It also means not having to switch in LHR. Also - less risk of strikes - take BA - if its not the pilots, the cabin crew, check in staff and even the baggage handlers are threatening strikes. And at the slightest suggestion of trouble, the entire short haul network simply ceases to exist - they cancel EVERYTHING.

So, even if the price is not that much below the high fare airlines, LCCs do have a something more to offer besides the price of the tickets. And, it is obviously a successful idea - as the fastest growing airlines are the LCCs.

And as for weathering the storm - it was the LCCs that went from strength to strength following 9/11. But - national high fare airlines - such as Swissair and Sabena went out of business. When, at the same time, easyJet and Ryanair grew exponentially. I'm not saying they had an easy time of it (no pun intended), but they got through.

Any idoit can charge £100+ for a short domestic hop (whats left of them) on a high fare airline and make a profit, but only a wise, efficiantly run airline can charge half that and still be very profitable at the same time.

HappyFran

30th May 2008, 09:49

Very sad news today that Old Sarum Flying Club (OSFC) has gone into receivership :{:{.

The real human side of this downturn comes into sharp focus when you actual know people who are directly, and painfully, affected.

I found all the front office staff and instructors a really nice bunch of professional and helpful people.

I hope they managed to get there monthly pay before it rolled over. It would also be nice to believe that a new enterprise can be created to resume the activities.

This rather sadly this could be a fortaste of more failures as the impact of fuel prices and a lack of punters with cash to splash out on indulgences.

OSFC owe me a few £100, fortunately I used a credit card, so hopefully I will see it returned. But it does serve as strong reminder about the risks of paying upfront.:ooh:

heli_port

30th May 2008, 10:40

http://www.ft.com/cms/s/0/ad84e560-2ddf-11dd-b92a-000077b07658.html

By Peter Thal Larsen, Banking Editor
Published: May 30 2008 02:05 | Last updated: May 30 2008 02:05

Britain’s banks and building societies could absorb a 20 per cent fall in UK house prices in a year without further denting their capital reserves, according to research by Moody’s, the credit ratings agency.

The study, to be published on Friday, comes as shares in the UK’s largest lenders continued to slide on Thursday, raising fresh concerns that the investment banks that have underwritten the rights issues for Royal Bank of Scotland (http://markets.ft.com/tearsheets/performance.asp?s=uk:RBS) and Bradford & Bingley (http://markets.ft.com/tearsheets/performance.asp?s=uk:BB) would be left holding a substantial proportion of the new shares.

Shares in RBS slipped 2.6 per cent to 231.75p – their lowest level for a decade, and closer to the 200p price at which banks and investors have underwritten the £12bn fundraising. Meanwhile, Bradford & Bingley’s shares dropped almost 7 per cent to close at 90.5p – only 8.5p above the 82p underwriting price for its £300m rights issue.

The weak share prices reflect growing concerns about the impact of the slowing UK economy and falling house prices on banks’ profits. Investors are worried about a repeat of the housing slump of the early 1990s.

However, the Moody’s research suggests that even if house prices fall by a fifth – similar to the drop in the early 1990s and significantly more than many economists are predicting – most banks and building societies will still have sufficient capital reserves. But a 50 per cent fall in house prices would leave many banks needing fresh capital.

“We found from our stress tests that the mortgage lenders do have a considerable ability to absorb a substantial downturn in that market,” said Elisabeth Rudman, a Moody’s senior credit officer.

RBS, HBOS (http://markets.ft.com/tearsheets/performance.asp?s=uk:HBOS) and B&B have launched rights issues to rebuild their balance sheets, although these capital raisings have largely been designed to boost reserves after the banks suffered losses on investments linked to the US mortgage market.

Moody’s said it could not rule out further writedowns at the UK banks until US house prices had stabilised.

The falling share prices of RBS and B&B have confounded bankers, who priced the rights issues at a heavy discount in order to increase their chances of success.

But the sell-off has also hit banks that have resisted the pressure to raise capital. Shares in Barclays (http://markets.ft.com/tearsheets/performance.asp?s=uk:BARC) on Thursday fell 9.75p to close at a five-year low of 377.5p.

Copyright (http://www.ft.com/servicestools/help/copyright) The Financial Times Limited 2008

peterinmadrid

30th May 2008, 16:20

Given the state of the world's economy, the current price of oil, peak oil theory, another airline going bankrupt every week, airlines announcing plans to reduce their fleets and layoff staff, self sponsored type ratings and "pay to play" line training programs - I ask myself if I am making a good investment and whether is it worth continuing to work hard and spend huge amounts of money on a career that is looking increasingly inviable. I love flying and there is nothing that I would rather do professionally - but there comes a point where you have to pay some attention to reality and think about whether you are just throwing money away. My flying school (the cheapest here in Madrid) has just increased its prices by 30% and so that's suddenly an extra xx thousand euros at a time when the economy is in ruins. I wonder if I am alone in thinking this way. I know a lot of people will say "never give up" but the outlook is getting bleaker each day and I don't want to spend 80,000€ on a license that I will never use (if I never find work) and costs several thousand euros each year just to renew.

bajadj

30th May 2008, 16:27

you took the words right out of my mouth.

I'm now seriously considering finishing groundschool and then going back to my old job for a year and reassessing the situation then. Am i correct in thinking that you have 3 years grace after completing ATPL theory to get your CPL/IR before having to re-take the 14 exams??

I'm very sad that it's come to this but I think it's the only financially sensible option, unless anyone has a better idea, a job, or a magic wand????

SparksFlyHigh

30th May 2008, 16:29

I dont think anyone can really be any more useful than just saying "its up to you".

Cause really it is. We know the economic outlook and we can see what is likely to happen. I am going to be investing in it but thats the choice that i have made. Maybe it will turn out to be a stupid risk that should not have been taken, and maybe it will work out for me.

Wee Weasley Welshman

30th May 2008, 16:49

If you are deep into training right now (CPL or IR phase etc) then you've probably timed it to be just wrong. There won't be any jobs in a few months time. If you are earlier in the training plan such as hours building or groundschool then its probably wise to slow everything right down and think about alternative work for a year or two and pay off debt.

Timing is everything in this industry.

WWW

bajadj

30th May 2008, 17:18

well, in six days i'll be finished with groundschool. The original plan was to go abroad and work until end of september, after which time i'll have enough cash for the hours build, cpl/IR and mcc, but not a type rating, then hours build in october in the states, then CPL/IR blah blah starting mid november.

The plan now maybe to still do the hours build as the euro/dollar rate is still at just about record highs, but then sit tight and perhaps work some more and at least save enough for a debt free instructor rating on top what i've got should the economics turn out as bad as we fear. At least that way i'll have no debt (but no money either!!) when i've finished the flight training and if it's instructing for a year or two at least i'll be build hours and getting paid for it and improving my chances when the upturn starts.

Obviously I'd much rather go straight to the airlines but as thats looking increasingly unlikely I'm looking to hedge my bets somewhat.

sensible??? or wimpy?

peterinmadrid

30th May 2008, 17:41

Regarding expiry of the theory exams, I have just checked and you have 36 months from the date of your first pass or partial pass to obtain the CPL and IR. I am taking the exams myself next week. I am still going to do hours in the US this summer as I have already bought the plane ticket and the dollar rate is very low, but then I think I might wait and see before continuing further. I am not planning on getting into debt and I think that at the moment I might go as far as CPL, FI but obviously that depends if flight schools continue to have vacancies. At the moment I think there are a reasonable amount of job opportunities for instructors, but I am concerned that that might change if people stop moving up the ladder and less people decide to learn to fly given the combination of the negative economic outlook and rising prices. Personally if I was having to borrow money I would stop right now. I can justify spending a certain money on this "hobby" of mine if it ends up being just that, but each step is more expensive and less useful than the one before if you don't end up with a job (higher grades of licenses expire more quickly, cost more to renew etc).

sawaya

30th May 2008, 18:10

WWW Please when you say there will not be any jobs please refer to Uk i happen to hold two nationalities one happens to be kenya,there are very many jobs going albeit for citizens,jobs on offer anything from brand new ATRs to 737 800 with ratings fully paid by the airline and salary from day one.

you are a Mod please know pprune is used by people from world over,the fact that things will be tough in the UK does not mean its world over,you keep on quoting stuff that apply to UK,the world is bigger than the Uk

Wee Weasley Welshman

30th May 2008, 18:24

That is a very fair criticism. I do write to an audience that I perceive as being in their 20's and British without a Trust Fund. Whereas this forum has a much broader audience.

I have tried to mention that the BRIC nations will be booming and that in terms of global contracting jobs there has never been a better time to be a pilot. I could take any one of a dozen well paid jobs around the globe tomorrow if I chose to do so. There really is a pilot shortage in India and the likes.

A quick reality check shows that at least three quarters of Wannabes on these forums are young and European. Half are British.

I take your point though. Wannabe Patel should be borrowing the Farm and getting their training done ASAP. For him these are the Hamble years. Which is the root of the problem we face in the West..

WWW

VirginSkid

30th May 2008, 18:38

WWW,

Sorry, I dont really understand your statement - care to explain?

"Wannabe Patel should be borrowing the Farm and getting their training done ASAP. For him these are the Hamble years. Which is the root of the problem we face in the West.."

eikido

30th May 2008, 18:55

What if the airline industry never rises again after this fall?
Oil is getting more expensive and maybe running out?
In 4 years, the barrel might cost $400? How the hell will it be possible to lift the airline industry?

Eikido

geordiejet

30th May 2008, 19:10

I agree with WWW:ok:. Right now I'm scalling back on the spending towards flying. Working in a car factory - dull as anything - but I'd rather be earning a decent wage than spending on flight training. The IR is about to expire, but I'm going down the instructor route, so not too bothered about that at this time. And I'm so skint after my CPL/FIC course, that I just don't have the funds to begin completing it for another few months.

When my CPL eventually comes back from the CAA - Im hoping to finish my FIC and teach at weekends. And once the storm clouds have passed, I might move in to teaching full time. It's taken me 3 years to get the CPL/IR - and now there are no jobs - typical of my luck! But what can you do? Well, spending many more thousands on flying is not something I'm prepared to do:=. A little by little, but I'm not maxing out any more credit cards, or taking out any more loans.

No doubt there will be some people getting jobs, but, I would rather spend £70k on lottery tickets given the current circumstances. I think this is going be a very harsh Winter this year, and I really do think WWW tells it like it is. It's not what you want to hear - but it's what you need to hear!:ok:

The outlook is bleak (well, unless you are an FTO salesperson), and the signs are all around - even real life pilots on other threads have said things don't look too rosy. And in the past 24 hours, both Silverjet and Old Sarum are no more. There are talk of one or two British airlines going bust this Summer (but nobody has named them - so I've no idea who they are).

These are tough times, a lot different to when I began flight training.

Continental Drifter

30th May 2008, 19:14

Peterinmadrid - mate, a pass in the ATPL theoretical exams will be accepted for the issue of a CPL or IR during the 36 months from the end of the month of the date of the FINAL pass of the examinations.

heli_port

30th May 2008, 19:22

Time for those boffins to come with a new type of propulsion :p

eikido

30th May 2008, 19:37

Agree :ok::}:)
However. Implementing new technology takes around 20 years!
So we have to start next wee... errr tomorrow! :\

Eikido

no sponsor

30th May 2008, 19:42

The 'Hamble years' refers to the 60's and 70's when BA had their own flight training establishment at Hamble in southern England. Times were good for those fellows, on the whole. Long careers, with huge salaries awaited them in BA. The last of the Hamble guys are now close to retirement in BA. However, it was not all milk and honey. In the first oil crisis, in the early 70's, many of those cadets didn't get to go to BA since they stopped recruitment. Many went on to fly in Qantas and Singapore airlines. One of those chaps now flies for my airline, after spending his first 7 years in Singapore before joining BA and retiring a couple of years ago at 55.

In India times are good, but there are now far too many CPL/IR holders than there are jobs currently.

kippax

30th May 2008, 21:13

My view:-

Airline mergers will happen not just in Europe but across the pond, in a bid to remain a going concern

Take a look at FCA / TUI on a typical Sat, last summer they would of had 4 flights going to PMI for example, this summer it will be two full acft in total. TCX & MYT same type of scenario

You have strong airlines currently EZY, Monarch, TUI & TCX I feel however, there is one more airline that will go (I hope to god I am wrong!)

Airlines will and are sending back gas drinking machines when off lease, i.e EZY getting rid of their B737's, but are replacing these with A319's up to the end of 2009 according to my contact

I feel if you train while you earn, kept your debts low, you will be able to have a life and survive once finished - you may end up waiting 1 / 2 years for your first job, but you still want to go on holiday, buy clothes, treat the wife etc etc??

Contacts is also the name of the game, ensure you network and talk to current line pilots down your flying school

At the end of the day, if it's your dream then train, but please keep an eye on your financial situation, oh and having an understanding wife / girlfriend helps ;)

Good luck to one and all

KP

Airlines will review their routes and pax numbers

kj990

31st May 2008, 06:37

More alarmist media nonsense, tut.

http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article4036174.ece

heli_port

31st May 2008, 07:39

Suzy Jagger in New York div#related-article-links p a, div#related-article-links p a:visited { color:#06c; } The global airline industry is facing a recession far more severe than the slowdown endured after the terrorist attacks of 2001, a leading aviation expert claims.

William Swelbar, a consultant to the Massachusetts Institute of Technology, told The Times that the true health of the aviation market - especially in the United States - will not become clear until this autumn, after the key holiday season.

“Many flights ... over the next few months were booked months ago, so it distorts the true picture of what is happening. What is for sure is that we are headed towards a severe slowdown. We may already be in a recession,” Mr Swelbar said.

His comments came as SilverJet, the business-only airline, left passengers stranded after admitting that it had run out of cash and had suspended operations.

Experts and aviation executives have said that record oil prices have fractured the traditional business model of most airlines.
Steve Lott, a spokesman for the International Air Transport Association (IATA), yesterday described a “perfect storm” that is heading for world airlines, to which the American market is especially sensitive.
“The economic slowdown in the US, the oil price and the weakness of the dollar are all conspiring to hit the aviation market. Americans are going to be thinking hard about whether they can afford to travel. It's not just economy travel. In March, globally, we saw the fastest decline in premium traffic for five years. The outlook is grim.”
Mr Lott said that airlines were being squeezed on two fronts: falling passenger traffic and rising costs, driven by the oil price.
According to IATA, global passenger traffic slowed to a 4 per cent growth rate in the first three months of this year, compared with 6.7 per cent for the same period a year earlier. Many expect traffic to shrink much further by the end of the year.
One airline executive said: “The problem is that we have already cut the fat - we did so after 9/11. There really are no more jobs to cut. The way forward is to cut capacity, big time. You are going to see planes grounded just to stem the losses and fares are just going to have to go up.”
British Airways, having bolstered its balance sheet after the 9/11 attacks with a £5.9 billion rights issue, is in better health than many rivals, but is believed to be considering ways of grounding about a fifth of its fleet.
Frances Farrow, chief executive of Virgin USA, said that if airlines fail to raise prices to respond to the increasing oil price, “everybody is in trouble by the end of the year. Everybody. Something has to happen.”
She said that older “legacy” airlines such as American Airlines and United Airlines run older and less fuel-efficient aircraft, so face an immediate disadvantage. However, United and US Airways confirmed yesterday that a merger of the two carriers would not happen “at this time”.
Many airlines have tried to avoid raising fares bacause the slowdown in passenger traffic has made competition more fierce. Instead, some have imposed fuel surcharges and extras.
Jet Blue has recently started to charge between $20 and $30 (£10 to £15) for a window seat, while American Airlines this month introduced a fee for checked-in luggage.

Have your say (http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article4036174.ece#comments-form)

Have your say (http://www.pprune.org/forums/#comments-form)
How can low cost airlines make a profit?Take Ryonair ,for example.They were complacent budgeting for an oil price of just $37.They should have budgeted for $137.
stephen hulton, eure, france
Peak Oil observers have known without doubt that new runways for example at Heathrow would never end up being justified because of this effect. Everyone else just wouldnt listen.
Dan Cassidy, Middlesbrough, UK
Airlines can charge for everything they possibly can but I think they will now be forced to stop treating passengers like 'cattle' and start improving customer service on board to maintain numbers and repeat custom. Welcome to a new golden age of flying.
Khaled Shivji, London,

heli_port

31st May 2008, 07:43

http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article4036769.ece

Those passengers sipping the better vintage wines at the front of an aircraft have subsidised economy travellers squashed in cattle class down the back for decades.

A £1,500 ticket to fly business class across the Atlantic has managed to offset the modest £20 profit each way that British Airways and Virgin Atlantic are estimated to make on every economy seat between London and New York.
But as the price of oil shot through $130 a barrel this month and shows no sign of slowing, that business model is broken.

Struggling to stay competitive amid falling passenger numbers, airlines have been loath to raise fares. Instead, a “bargain” £266 return air fare secured on the web between Heathrow and JFK has been supplemented with extra charges for bags checked in, for window seats and fuel surcharges. The extra free glass of wine went long ago for most airlines. There is a limit to how much airlines can patch over the discrepancy between their soaring costs and revenues.

Virgin Atlantic estimates that a transatlantic flight costs an airline between $200 and $400 per passenger, depending on how efficient (that is new) its aircraft is, and how well the company has hedged against the oil price.
With the number of business travellers falling at its fastest rate since 2002, the front end of the jet can no longer pick up most of the bill. And it is going to get worse.

Consumer confidence is widely perceived as an accurate way of plotting the trajectory of demand for air travel. Ominously, US statistics this week pointed to the lowest level of consumption since the 1950s in America.
While airlines have experienced financial turbulence before, it is only seven years since they were forced to cut costs through redundancies after the September 11 2001 terrorist attacks. There is less fat to trim this time around.

As Delta, the US airline pointed out, cutting capacity is an inevitability. The carrier believes that most airlines will have to ground fleets to stem the losses incurred on many routes.

The other option is for airlines to consolidate and remove overlapping costs such as headquarters, ground staff and duplicated routes. So far, this has failed to work.

United Airlines, fresh from the Chapter 11 bankruptcy protection it sought after the September 11 2001 attacks, tried to merge with Continental but talks failed. It then looked at opening negotiations with US Airways, which had also attempted to do a deal with Continental. The heads of United and US Airways said yesterday that merger talks had been suspended. “We are evaluating other options,” Glenn Tilton, chief executive of United, said.
MIT, the US university, is not alone in believing that a major American airline will go bust within a year. There may be many more stranded passengers, stuck with worthless tickets issued by bust airlines before the year is out.

peterinmadrid

31st May 2008, 07:44

I think that we needed to start developing alternative fuels 20 years ago and needed them to be ready for consumption last year. Unfortunately that hasn't happened and airlines now have a stark choice between filling up with kerosene at whatever the price and grounding their planes. It appears that leaving the planes parked is starting to look more profitable than flying them. Perhaps the best license to get right now is a tug license!

heli_port

31st May 2008, 07:46

With every cloud there is a silver lining. Just as Silverjet was closing its doors, shares in rival airlines, including British Airways, were climbing despite the flag carrier's well publicised difficulties with fuel costs.

BA yesterday risked losing holiday traffic by announcing that it will charge a £218 surcharge on return flights to Florida and California. Customers may look askance, but investors were pleased to see it passing its extra costs on to passengers.

The collapse of Silverjet also provides the happy, for BA, situation that business class capacity has been taken out of the market. Analysts at Citigroup reckon that net business class capacity has fallen by a fifth since the beginning of the year.

Since December all three business class-only airlines - MaxJet, Eos and Silverjet - have collapsed, reducing the business class capacity across the Atlantic by roughly 30 per cent. American Airlines has also terminated its London Stansted/ New York service. This more than offsets the increase in capacity that the launch of open skies ushered in, when Delta and Continental added new services this spring.

BA has invested heavily in its transatlantic business-class product in the last year in the face of these upstarts. Now the opportunity is there for it to cease almost half the critical transatlantic market, on the back of Silverjet's demise.

But the main reason airline shares, including easyJet, have recovered steadily in the last two days is the easing oil price.

Having hit an all-time high of $135 a barrel last week, oil has slipped back to $127 a barrel. The price has weakened as there has been mounting evidence that high prices are starting to erode demand in the short term.
Even at this level however, it is far in excess of the $70 - $80 a barrel on which airlines have traditionally budgeted. Shares in BA may have had a respite today - but it is only a few days' breathing space.

:ooh:

Ideal Line

1st Jun 2008, 00:55

peterinmadrid,

I suggest you do a little research into the so called "peak oil theory" rather that just worrying about it. There is are many untapped oil reserves which were once unfeasible due to the low price of oil. Besides, in a couple of decades or so, many planes will be probably be using some sort of biofuel. Two airlines globally have already run successful trials.

The economy will eventually recover, and it comes down to the question, would you rather be qualified during an downturn or would you rather be unqualified during a boom period? I know which I would choose.

TRY2FLY

1st Jun 2008, 01:43

OK please - enough with the negative vibes:{:ugh::mad::yuk::=

peterinmadrid

1st Jun 2008, 02:16

I hope that you are right, Ideal Line. Regarding peak oil, there is a huge amount of information on the internet but depending on where you look predictions range from end of civilisation as we know it to a short transition period to new fuels. I don't know who is right but it is a major concern. I don't subscribe to the doomsday scenarios - war, famine, economic disaster etc, but I do think that there it has a lot to do with why fuel prices are rising so quickly. I think that alternative fuels and non-conventional sources of oil will help us avoid total disaster, but developing all of this takes a long time. What the price of oil does in the meantime and how that affects the aviation industry is what worries me.
Some analysts are predicting prices to go a lot higher (around 200$ by the end of the year) and if you look at a graph for the price of oil over the past couple of years and extrapolate it the future really doesn't look good. Recently I have been looking at bloomberg.com to see the price of oil - today it has gone up another dollar.

tonker

1st Jun 2008, 08:20

Things are going to be bad but we have just lost two people from our base alone, both of which will have to be replaced by new First Officers.

Finish your training and get an FI rating which are now seamingly unfashionable, get some flying under your belt and before you know it things will be picking up. Who would you recruit, the quitter or the bod that kept going and flying whatever he or she could?

It is worth it, but took me nearly seven years!:ok:

moona

1st Jun 2008, 10:03

"Terrible economic outlook - Time to quit?"

Me myself, im now looking to slow things down a bit rather than quitting. I've got my last(hopefully) ground exams next week. Then about 35 hrs of hourbuilding left, which I now intend to take my time on. Big long enjoyable trips. Now planning on doing CPL at a local airfield, again taking my time making the most of it.

The best thing is rather than doing it all full time like I was initially planning I can now do it all part time and save 15k for the IR in about 30 months time. All going to plan the industry will then be on its way back up I will have a fresh IR with good currency.

Hell if the industry dosent recover 15k buys a share in a nice a/c, sports car etc:ok: will also have had some fantastic and enjoyable flying.

Laroussi

1st Jun 2008, 10:20

That's the way Moona.

Don't totally give up, just slow down a little and enjoy the process. If you have a true love for flying you'll continue flying anyways.

So just go forward and enjoy.

Mikehotel152

1st Jun 2008, 12:02

Cor, soon there will be more instructors than student pilots! :confused:

Re-Heat

1st Jun 2008, 15:34

The oil industry aka The Government has all the power in the world to stop oil prices rising but it's something that needs to be done to curb human society's thirst for oil. The current increase is due to speculation as well as legitimate fears over lack of output.
Why do people blame speculators, when they have no idea what they are saying? There is no massive storage capacity anywhere for "speculators" to hoard oil, and influence the price of oil. It is totally insulting to any educated commodity market participant to suggest that they are in the business of causing massive oil price rises. I suggest you read "The Economist" this week for a complete and sensible rebuttal.

On the other hand, the Government is a massive problem. Idiot Brown increasing North Sea oil taxes to 50% compounded an issue of falling extraction rates, by dissuading additional investment in those fields, which could lead to many being abandoned as uneconomic far before they would be uneconomic in fairer tax environments.

Other countries have ridiculous subsidies that lead to misaligned incentives to use oil-based products, and largely subsidise middle-class car use instead of helping the poor - as is often incorrectly claimed.

Back to the issue at hand...

drivez

1st Jun 2008, 19:53

I beleive that ryanair even with the rising fuel costs are almost doubling their fleet. Apparently taking on 200 pilots each year, and according to their website thats not just experienced but also cadets.

I think that their will be a shift in travelers however. Gone will be the ages when everyone uses an airline to go abroad but holidays will be less frequent abroad anyway. However Buisnessman will pay whatever price to travel abroad because it's a necessity. And fedex and royal mail will always use aircraft for express mail. Sure there will be less jobs but it's all about determination because i beleive that if you apply enough and put inenough effort then you will get the jobs that are out there.

bajadj

1st Jun 2008, 20:32

I wish that were true. The fact is there are far more cadets than there are jobs for cadets, I don't believe there are many people who will spend upwards of 40k and not apply themselves or put in the effort.

And ryan are actually grounding airframes at the moment, although i believe they have loads on order.

Personally i don't see it affecting holidays abroad a great deal, as the weather is the uk is so piss poor that a holiday at home is pretty much unbearable. In my view it will be the city breaks that will suffer first when people make their cutbacks, which will screw the likes of ryan and easy, and possible bankrupt the smaller loco's.

That above para is my opinion, and obviously not fact!

Wee Weasley Welshman

2nd Jun 2008, 07:26

And this morning the Bradford & Bingley has been suspended from the London Stock Exchange. Absolutely no suprise from me as I've been expecting this since October.

Whilst some sort of rescue is doubtless being knocked up in the Treasury this morning this will only seal the fast growing impression amongst the public that something serious isn't right with the housing market. Buy To Regret is going to be like saying Endowment Mortgage. There were just under 1 million BTL mortgages sold last year. Most to amateur landlords many using insane gearing. Personal insolvency will result in Auctioning. Auctions are currently needing a 40% discount to achieve a sale.

These losses could be epic.

WWW

Jonty

2nd Jun 2008, 07:35

And this morning the Bradford & Bingley has been suspended from the London Stock Exchange. Absolutely no suprise from me as I've been expecting this since October

Not quite the whole story, in fact, not even close.

http://news.bbc.co.uk/1/hi/business/7430460.stm

Wee Weasley Welshman

2nd Jun 2008, 08:05

You don't actually believe the Biased Broadcasting Corporation do you?

I can't trade B&B shares and my broker says they are suspended. My IG Index account has them down 24p at 64p per share. Which is way below the Rights Issue price. They can't give themselves away. Which is what happens when you repeatedly deny you have funding problems and then announce a Rights Issue, sell 23% of yourself to TexasPacific on god knows what terms and then announce a profits warning and the CEO legs it citing health issues.

BTL will be the spark that explodes the house price market. And its not going to the sort of boom that homeowners like.

WWW

Jonty

2nd Jun 2008, 08:17

You don't actually believe the Biased Broadcasting Corporation do you?

FT is saying the same, and the new rights issue price is 55p well below the current 65p trading price. If I were you I would talk to your broker, he may be ripping you off!:E

http://www.ft.com/cms/s/0/9b734a5e-3075-11dd-bc93-000077b07658.html?nclick_check=1

I would agree its not pretty, but its hardly the explosion you talk about. Have you ever thought of working for the Daily Mail?

Wee Weasley Welshman

2nd Jun 2008, 08:37

Hmmm, a rights issue at 55p. This time last year they were above £4. I'd say thats pretty much the same as being a busted company. All because they are up to their eyes in the Buy To Let market and Liar Loans (Self Cert mortgages).

Whatever the exact fate of the company its clear that the House Price Crash is real and it is large. This always results in recession. Recessions always lead to airlines going out of business. This is always terrible news for Wannabes.

If I had a big red flashing light I'd switch it on now.

WWW

Jonty

2nd Jun 2008, 08:48

Interesting.

Land Registry say house prices up by 2.7%

http://www1.landregistry.gov.uk/assets/library/documents/hpireportapril2008.pdf

:E

Scott Duch

2nd Jun 2008, 10:29

I was going to commence training once i had left school however i'm now considering to study Aeronautical Engineering and do my JAR-FCL PPL at the same time and this would allow 4 years for the economy to become stronger once again. It's somthing that's very unpredictable. :rolleyes:

peterinmadrid

2nd Jun 2008, 10:53

Airline industry to plunge into loss (http://www.ft.com/cms/s/0/86bef28a-3088-11dd-bc93-000077b07658.html)

Record fuel costs will plunge the global airline industry back into loss this year, the director general of Iata warned at an industry conference - Jun-02

In depth: Airlines (http://www.ft.com/airlines)
Oil price forces Qantas to cut routes (http://www.ft.com/cms/s/0/7c4967b0-2ca8-11dd-88c6-000077b07658.html)
Airlines face battle for survival (http://www.ft.com/cms/s/0/cb8af0b4-2825-11dd-8f1e-000077b07658.html)

peterinmadrid

2nd Jun 2008, 12:10

XX621

2nd Jun 2008, 12:37

CAA & NATS don't seem to agree with all this gloom and doom. They see commercial traffic growing in the UK at between 50% & 90% by 2025 - as quoted in the main Mode-S consultation document (http://www.caa.co.uk/docs/1698/Main%20Consultation%20Document.pdf)

(This not a comment about Mode-S in anyway, just an illustration of how the authorities see things shaping up over the next few years).

I am tempted to believe that only certain sectors of the airline industry will be hit, whilst others will actually flourish. Surely, it depends on the business model of the airline, specifically how the predominant economic demographic of their customers is hit by the ecomomic downturn. Or in other words, I can't see Stansted deserted next year somehow. Everytime I fly a lo-cost airline I am surrounded by backpacks and under 30's who have never been better off than at any time in the past...and I can't see that changing soon.;)

heli_port

2nd Jun 2008, 13:44

You don't actually believe the Biased Broadcasting Corporation do you?

tbh www i believe the beeb more than skynews (right wing nonsense), cnn, fox news (pff don't get me started)

Land Registry say house prices up by 2.7%

interesting!

heli_port

2nd Jun 2008, 13:50

spotted this on yahoo

http://uk.news.yahoo.com/afp/20080602/tuk-britain-germany-airline-company-oil-a7ad41d.html

BERLIN (AFP) - High fuel prices will trigger a rash of airline bankruptcies, leaving only five major carriers in Europe, the head of easyJet's German arm said in an interview published Monday.

"Several airlines in Europe will go out of business," John Kohlsaat told Berlin's daily Der Tagesspiegel. "Theoretically, 50 are endangered."
Kohlsaat said several carriers had been hit hard by rising fuel costs and were sliding into the red -- a development that in the end would leave only British Airways, Air France/KLM, Lufthansa, Ryanair, "and us".
He said easyJet would weather the storm due to its relatively low operating costs and modern, fuel-efficient fleet.

"A new Airbus consumes 20 percent less fuel than an old Boeing 737," he said.

He said easyJet, currently the fourth-biggest airline in Europe, had no plans to revise its aircraft orders despite the high cost of fuel.
"We have ordered 119 and have options for another 88," he said. "We will double in size in the next five years."

EasyJet said last month that net losses deepened in the first half of its financial year to 43.3 million pounds due to steep fuel costs and the takeover of GB Airways.

Record-breaking oil prices have almost doubled in the past year and have surged by more than 20 dollars since the start of 2008
.