High Oil Prices: Does This Jeopardise Our Chances?

[imarkd]

Hello All!

I'm relatively new and this is my first thread. I did a search and couldn't find much on this... so don't shoot me if i missed one!

So onto my post...

With BA reporting a strong profit this year :D but warning of a huge increase in the cost of fuel causing them to discuss the possibility of a break-even result next year :sad: (SOURCE (http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article3949531.ece))... what does this say for the future of the industry?

We have already seen numerous airlines go bust or struggling and as oil prices look set to stay at over US$120 a barrel and could go higher it looks like we could see more airlines struggling financially.

Combine this with a possible recession in the US and low consumer confidence (and therefore possibly less demand for air travel) could we see a long term employment issue for wannabe pilots? What about job security for recently graduated cadets?

What are you opinions on this? Do you think becoming a pilot is a sensible career option to pursue given the economic climate we are experiencing?

Thanks in advance for your posts! :ok:

[Artificial Horizon]

I personally think that the year ahead is going to be a very tough one. Talking to one of our managers the other day he said that the 'break even' point for our business plan has already been passed by the oil price and analysts now expecting oil to go to $180 - $200 per barrell by the end of the year. Combine this with a bad housing market, inflation getting out of control, unemployment up along with bankruptcies and repossessions means we are in for a rough ride. I note today that Willie Walsh stated in the 'Times' that BA are looking at a 10% reduction in the flying programme over the winter season just to enable BA to break even in the next financial year. I could see numerous european carriers going bust e.g. Alitalia, flyglobspan, Jet2, Wizz Air with the ones that are left making significant losses causing a reduction in capacity. Maybe not a great time to be looking for work but probably a good time to train as the lull won't last forever.

[redsnail]

You have many choices. This assumes you really really really want to fly aeroplanes. (Note, I didn't say jets)

Ok. You can take a gamble and get onto the sponsorship schemes run by OAA, CTC etc. The gamble is that the airline will still honour the conditional employment. They don't have to.

You can gamble even more by doing a full time integrated course and emerge in 14 or so months with a CPL/IR with ATPL credits. You're hoping that someone will offer you a job that'll cover the huge loan. (Assuming you needed a big loan)

A safer more conservative approach is to do your training modular whilst keeping your "day job". You pay as you train and can stop at obvious sections. eg PPL etc. Save more cash for the CPL bit and the IR bit. You can time it as the economy starts to rev up again you hit the IR full time and you're current and raring to go.

If you're single and fancy an adventure and not to mention broaden your horizons, get the license and head off to the Caribbean and or Africa. You won't regret it and it'll give you experience and skills you'd be hard to find flying purely in Europe in a nice comfy jet. These skills will stand you in good stead for any future employment.

To survive any down turn requires flexibility and a minimal exposure to big debts. Usual downturn cycles generally go for about 4 years from start to finish.

So, I haven't said "don't train". Assuming you cannot get onto a sponsorship scheme (with it's conditional employment) I advocate the modular approach where you have control over when you train.

[RexBanner]

There's a long and tedious thread on this over on the other wannabe forum. To summarise the situation at the moment. The economy is not looking in great shape, however demand for air travel has been consistently rising for the last 30 years and its not going to stop now. Whether people like it or not, the baby boomer generation (which makes up a large proportion of the pilot workforce) is coming upto retirement in the next 10 years inclusive. These pilots will need replacing. Experience or no experience people will move into the Left Hand Seat and free up opportunities for First officers.

Fuel prices are high but any meaningful recession will see an end to that. However its a double edged sword as airlines will struggle anyway in a recession. Another reason for high oil prices is the poor performance of the stock market and people putting their faith in commodities rather than shares. When this turns around the price of Oil will drop, it may just be painful in the meantime.

I know there are large risks in training right now but whats the point in delaying your entire life until everything is "perfect" job conditions wise? What is perfect anyway? Even in good times you never quite know what is lurking around the corner to hurt the economy. This is the nature of the aviation business, it is highly cyclical. Yeah I'm worried about the prospects for the economy in the next two years but I know that there's no point spending your life worrying about things and stopping them living your life. You only get one shot, go for it.

[heli_port]

Personally i am going to go for it :p

I am aware of the state of the economy but i'll graduate in 2010 and hopefully we should start to see a recovery (i hope :p)

[Superpilot]

I have just read this interesting little article:

http://www.uk-airport-news.info/stansted-airport-news-120508.htm

Ryanair to halve fares; predicts more airline failures
12.05.08

Ryanair plans to cut its ticket prices by half despite soaring fuel prices, helping it grow substantially, Michael O'Leary, the company's chief executive, told German paper Frankfurter Allgemeine Sonntagszeitung. He also predicted more airline failures and said that he would leave the airline in 2 - 3 years.
Europe's biggest budget airline plans to double the number of passengers to 80 million and to double the number of planes to 300 within four years, Chief Executive Michael O'Leary said.

He added that the current record highs in oil prices will force some airlines into bankruptcy. World oil prices have rocketed 25 percent since the start of 2008 and have doubled in the past 12 months. If the high prices remain or rise over the next 12 months, some Ryanair competitors will go out of business, Mr O'Leary told the German daily.

Among the victims would be German's second largest airline, Air Berlin, he said, adding that five years from now, Ryanair and Germany's top airline Lufthansa would share the German market.

Mr O'Leary also reiterated plans to step down from his position in the next two to three years.


Good news all around then? :ooh: or just the industry's biggest rotweiller gone barking mad? :uhoh:

[Artificial Horizon]

Interesting times to come:

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