United Airlines says it will lay off 950 pilots

[peter we]

Mon Jun 23, 2008 3:48pm EDT


CHICAGO (Reuters) - UAL Corp, parent of United Airlines, said on Monday it plans to lay off 950 of its pilots.

A UAL spokeswoman said the No. 2 U.S. carrier informed the employees of its intentions on Monday.

http://www.reuters.com/article/businessNews/idUSWEN639920080623?feedType=RSS&feedName=businessNews&rpc=23&sp=true

http://moneynews.newsmax.com/companies/united_airlines_layoffs/2008/06/23/106888.html

[ray cosmic]

What is wrong in the US, with that kneejerk laying off people.
Very sad to hear this; all the best of luck to all involved.

[darrylj]

:sad: what is the airline industry coming too?.
i guess it's been sad for many years.

:(

[Rock_On]

Subject: United Furlough Numbers


This is Keith Rimer, system chief pilot, with a message for United pilots on Monday, June 23.
We announced on June 4 that we would be removing a total of 100 aircraft from our mainline fleet in response to record high oil prices and a softening economy. These reductions will begin in September, continue through the end of 2008 and well into 2009. If you follow the industry, you know that other airlines are taking similar actions. At last count, U.S. network carriers had announced plans to remove nearly 300 mainline aircraft from their fleets by the end of 2009, in order to reduce industry capacity.
Reducing our schedule to get back on the path to profitability in light of dramatically higher fuel costs inevitably involves reducing the number of people we have to run the operation. Reductions in salaried and management staffs have already begun in a number of areas. In flight operations, layoffs of salaried and management employees are expected to begin in mid-July. In total, the number of salaried and management positions at United will be reduced by 1400-1600 people.
With regard to reductions in pilot manpower, our scheduling group is finalizing details of the initial round of reductions for the fall, beginning in September. As a result, we will begin the related process of distributing furlough notices. The first notices will go out in mid-July to furlough approximately 100 pilots for the September flying month. The furlough process will be facilitated through our domiciles and follow contractual procedures.
Overall, our fleet reduction plans include our entire fleet of 94 B737 aircraft as well as six B747s. This will take time to accomplish – well into 2009 before it is complete. We expect that, as we reduce our fleet by these 100 aircraft, we will furlough approximately 950 active pilots by the end of 2009. Due to the number of pilots on military and personal leaves, we currently anticipate that approximately 1450 furlough notices will be distributed over time in order to reduce our active pilot ranks by 950.
We have had ongoing discussions with ALPA concerning ways to mitigate the number of involuntary furloughs. The outcome of these discussions could reduce the number of involuntary furloughs.
As always, we will keep you informed as decisions are made that could affect you. We hope to have more detail on the furlough mitigation actions to share with you as soon as they are finalized with ALPA. Details on the first furloughs for the September flying month will be available in a few weeks. At the appropriate time, your domicile will work with you during this process.
Furloughs are an unfortunate and difficult reality of the airline industry. It's common to find long-tenured pilots who have been affected by furloughs in their careers. We plan to the best extent possible not to be in a situation that requires pilots to be furloughed. However, circumstances unforeseen just several months ago in the case of unprecedented fuel prices are now causing us to adjust our flying and related manpower. As we move forward through this process, we will treat everyone in a respectful manner, understanding the personal impacts that these actions can have.
Clearly, this is a difficult time for us to operate through. However, safety, of course, must remain first and foremost when we fly. While business decisions are being made in response to the circumstances we are faced with as a company, I know that, as pilots, you recognize the importance of a single focus in the cockpit.
Thank you.

[beachbumflyer]

And how much $$$ are the top executives going to get?

[Re-Heat]

Irrelevant - executives are paid by returns to equity, not returns to the labour force.

[peter we]

What is wrong in the US, with that kneejerk laying off people.


I'm afraid its not a kneejerk reaction. Oil prices are staying high and may well go higher, Demand from China and India will make up for any fall in the west. Indian has been paying $6 a gallon for Gas for several years and their economy is still growing at 8%. Both countries can afford to pay the current price for oil and higher it would seem.
The Gulf states are expanding their economies and can affords to use their own oil at any price. T Boone Pickens has said that thats it, oil supply has peaked.
The world is going to have a hard future.

[BANANASBANANAS]

$9 per (USA) gallon in UK.

[desert storm]

It seems like our folks will have to migrate overseas specially to Middle East and Asia.
Shenzen Air has received more than 200 applications just this month for its 737 fleet, Emirates over 500 in 2008.
CNN its just broacasting that Qantas pilots are on strike!
New world crisis on the way AGAIN? :sad::(

[peter we]

"In 10 years, we will have exported close to $10 trillion out of the country if we continue on the same basis we're going now. It is the greatest transfer of wealth in the history of mankind,"

http://moneynews.newsmax.com/streettalk/pickens_peak_oil_call/2008/06/17/105212.html

****ed, we are.

[nigegilb]

Not really. Oil may have peaked but it will be a gradual decrease. Politicians need to address these issues by straight talking. More nuclear power for starters, otherwise the prettiest countryside in the UK will be blighted by wind farms. Go with what works, go nuclear.

[Re-Heat]

"In 10 years, we will have exported close to $10 trillion out of the country if we continue on the same basis we're going now. It is the greatest transfer of wealth in the history of mankind,"
What rubbish. The oil is productively used (hopefully) to further generate profits and wealth of US companies. Does this commentator suppose that the US should not pay for resources it consumes in the business of wealth generation, or is he just plucking an extortionate-sounding figure from the air for political gain...?!

[peter we]

What rubbish. The oil is productively used (hopefully) to further generate profits and wealth of US companies. Does this commentator suppose that the US should not pay for resources it consumes in the business of wealth generation, or is he just plucking an extortionate-sounding figure from the air for political gain...?!

T Boone Pickens is not just anybody http://en.wikipedia.org/wiki/T._Boone_Pickens,_Jr.. Your politics have nothing to do with it its a simple case of mathematics (he's a financial supporter of GW Bush if that matters).

Total current US expenditure on oil is $1.05 Trillion dollars per year (21million barrels per day), over ten years you get the 10Trillion dollar figure. Its about 7.6% of GDP.

US currently imports 13millions barrels per day. At $137 thats $650billion per year extracted from the US economy. US production is declining and demand increasing. US oil consumption per head of population is twice that of the EU countries.

[NoSoupForYou]

Irrelevant - executives are paid by returns to equity, not returns to the labour force.

LOL! Perhaps that's how it works in the UK re-heat, but not here. Quite the contrary- as UAL's equity has sunk to new lows, its executives have continued to award themselves larger and larger bonuses. It's good to be king...

[Founder]

The only way I see it for the US economy to save it self is to become less dependent on outside oil. Take a look at europe.
- Build new nuclear powerplats instead of oil and gas
- Introduce E85 as a fuel to replace normal 95 and 98 octane fuel.
- Focus a lot on wind and wave power.
- Solarpower

Try flying over the neatherlands, denmark or sweden without seeing one single windpower generator... not happening =)

If they can reduce the amount of oil used by the normal population, the price of oil for aircrafts might drop...

[airfoilmod]

At one time 1988-90, This pioneer of aircraft construction and transportation decided to stretch out into rental cars and Hotels. Hertz and Hilton. At various times, this legacy carrier has had multi-tiered pay scales for identical work, hat requirements and various exercises in areas unrelated to its core business, originally A/C building, then transport when forced to divest of the building part.

Oil is part of the reason, but not the only one. Not the only aging fleet of midrange A/C, United has some 100 runout airframes, as does American.
What serendipity!! A reason that makes "sense" to the shareholders, furloughees, and other line staff. Don't need hundreds of pilots if clapped out Boeings are headed to D/M. Same MD-80.

Is UAL and its Board creating a new 100M slush fund for executive benefits, incentives and golf money? Standby. When the line had 10 managers in Flight Ops, it had dozens and dozens of "VP'S" SYSTEM WIDE.
She'll land on her feet. Not having to shell out 3.5B for new Boeings and sustain an overloaded staff works wonders for the available execapital to cushion the fall of those admins who had to worry until they came up with the perfect move (s). $6/share?? Hmmmmmm.......

[PJ2]

Irrelevant - executives are paid by returns to equity, not returns to the labour force.

NoSoupForYou is correct which is the reason executives are the object of substantial scorn by employees in the US and Canada. But the statement is incorrect in another way. Anything that "costs" and subtracts from the bottom line is viewed negatively. Therefore, anything done to employees that reduces their cost actually is a "return" to equity and executives are rewarded for same. The value of a company usually rises any time the employees are beaten down (or laid off) as they, like any expense, are considered financial liabilities from an investor's pov. That's the way business works in the US and, increasingly, Canada.

[airfoilmod]

Very well said.

[Henry Winkler]

"CNN its just broacasting that Qantas pilots are on strike!"

Desert storm. It's the engineers that are on strike (sort of, 4 hour rolling stoppages). Not the pilots.

[heli_port]

BBC NEWS | Business | United Airlines sheds 950 pilots (http://news.bbc.co.uk/1/hi/business/7470868.stm)

US carrier United Airlines has said 950 - about 14% - of its pilots will lose their jobs as spiralling fuel costs and weak consumer spending hit earnings.

[aviator]

Re-Heat said: "Irrelevant - executives are paid by returns to equity, not returns to the labour force. "




That said, the facts speak for themselves:

So far this year, shares of UAL have decreased almost 90% percent of their value...

At the annual shareholder meeting on June 12, they awarded themselves $130 million dollars: " Today, our stockholders showed their confidence in our Board, overwhelmingly electing Directors to another term, and approving an equity incentive plan that will enable United to attract, retain and reward key leaders."

You couldn't make this up :ugh:

[lemay]

An old friend of mine who currently works as F/O on the B757/767-fleet has been noticed that he may expect to be downgraded (...) to the A320 accompanied by significant pay cuts. What a waste of resources to train somebody to fly a new airplane when the company is short of money...:ugh: At least he still has a job.:ok:

Whatever the US Airlines are doing, they did not seem to have the right recipes since 9/11 while most of the others were thriving. This should not lull us into a false sense of superiority though. It's potentially dangerous and contageous and we should be aware of the fact that the well being of the world's biggest economy has quite an impact on our life.

Some wise man once said: 'If the US economy has a cold, Europe may expect to get a pneumonia...'. Not good.

[Me Myself]

Folks, this is only the beginning. Those among us who feel unvulnerable because they are working in for a yet profitable airline should wake up and smell the coffee. We're in for a new era. I give you just a couple of years for people to discover the charms of a summer in Swansea or Le Touquet instead of swaning in Miami or the Malives.
Conference calls will replace those comfy Club class seats. The model used for projections is stuffed. How can one sill say airline transport is growing at 5% a year when capacity is reduced so drastically. This oil crisis is nothing like the others, oil production will never increase. wannabees should reassess their carreer moves.
I'd be very happy to still be able / allowed to fly a 320. Those 950 guys are not going to find a job tommorrow.
By the way, read this fantastic book " The Disposable American " by Louis Uchitelle ( New York Times ). In this case American can be replaced by every nationality under the sun. Chilling but so very true.

[peter we]

Some wise man once said: 'If the US economy has a cold, Europe may expect to get a pneumonia...'.

Thats no longer true. In 1945 the US economy, was 50% of the entire world, now its 21% and falling. The EU economy is bigger than the US's and although important its only a small (-ish) part of the EU's trade.

[airfoilmod]

Any Economic Alliance can be compared to a single country. It isn't new, and they don't last, historically; the EU hasn't got off the ground yet.

Trading vectors are simply another lens to look through. The more there are the more one must stretch credulity to gain reasonable comparisons.

Nations are less interdependent now than in 1945. More stuff to trade, more places on line in manufacturing, resource, technology, etc. This dilution of resources and goods makes for a fluid and volatile political landscape. One thing about aviation, International travel will diminish markedly in the years to come.

United Air Lines is basically four separate concerns and one of them just died. Intrastate carriage remains successful, and because the US is geographically quite large, Aviation will be important here always.

In a perverse way, the EU is killing European aviation, as it diminishes the historical importances in the region. The EU will not work in the way it was intended. It is a "union" supposedly with common goals. Look at the history of unions, guilds and alliances. There is never enough glue to keep a mob of greed together.

Notwithstanding the illegality of determing people's future by strangers, unelected and perverse to the best interests of the "represented", when said potentates vote themselves treasure because they can, the game is up.

United still wants to be all wings to all people, it is an absurd idea.
Fortunately for the citizens, some countries are too large to support despotic government forever. It is a larger example of United's moment in the Sun.

[peter we]

The EU is positively worshipped in some countries.

[413X3]

executives are all part of "good ol boys" clubs. they keep hiring their club mates and continue to reward awful decision making. if an employee has sub-par performance, they are fired. if an executive has sub-par performance, they are given bonuses, raises, and press releases come out talking about how these decision makers are such a necessity and paying them more to stay is almost a requirement!

[413X3]

and the eu working with asia as their cheap labor force relies less and less on america. especially with the awful exchange rate, for some reason it seems american government decision makers are purposely trying to make america week economically. sure a devalued dollar does good for american companies selling abroad, but it also makes foreign companies lose money dealing with us, and they will turn elsewhere for business

[zhu_tou]

sorry guys simple question,(fortunately)not familiar with situations like this
since the rule last in first out applies,all furloughed pilots will be f/o's
does that mean that newly promoted captains will be downgraded back to f/o's?do they keep captain pay?

[777den]

pilots get paid for the position they fly, so if downgraded in aircraft type or seat the pay is adjusted to the new position.

[His dudeness]

"The EU is positively worshipped in some countries."

Where is that then? Surely not within the EU, maybe apart from the receiving

parties....

[Cripple 7]

Are they going to continue not wearing their hats? How much money does UA save if they don't issue hats to their pilots?

[pacplyer]

US currently imports 13millions barrels per day. At $137 thats $650billion per year extracted from the US economy. US production is declining and demand increasing. US oil consumption per head of population is twice that of the EU countries.

Is treasure really leaving the U.S? Ink and paper are pretty cheap when the dollar bank notes are not backed up by gold reserves anymore. We'll keep printing that funny money as long as countries have real commodities to trade for it! It's pretty incredible when you think about it. The federal reserve will keep printing monopoly money and charging the U.S. gov interest for it as long as the rest of us go along with it. The loser is the worker whose buying power is nothing with all those fake greenbacks flooding the world.

It's time to get rid of the central bank. It's printing presses are killing us. I've been hearing about this phoney "oil shortage" since 1971 when they told me we only had a few years left. Guess what? They were manipulating supply to rake in profits. Thirty years later it's the same old scam. untapped oil fields lay all over the world, (the Spratley Islands, Siberia, Indonesia) but with Texas oil men in the white house there has been no incentive to windfall tax companies who have curtailed their exploration in order to drive up return.

We have enough oil to turn this place into Venus. As aircraft ops only contribute less than three percent of the global carbon footprint, Aviation operations need to receive tax-free priority and be subsidized for the public good, as they were prior the the 1978 deregulation Act (in the U.S.). Private auto transport should be the real target before Airlines are allowed to wither into shoestring outfits. We can't go on letting every ox-cart driver in the third world upgrade to a steering wheel if we want to get control of commodity markets. (no, I don't know how we're going to do that part....)

That's what I think.

[peter we]

Commodities are still priced in dollars and a lot of countries have their currency linked to the dollar. Many are thinking about switching away. They have partly over come the problem of being paid in worthless paper by asking two, three times as much for payment in dollars than some other countries.

Paper currency isn't completely worthless of course, but printing it results in inflation and the bottom line is any country that uses the Dollar will end up far poorer. India, China, ME and Europe will continue to grow with the increase in commodities prices but slower. Poland is an interesting case, their currency has boomed against all others and they are going to continue with a 8% growth this year.
US and world economies to 'de-couple'
FT.com / Markets / Insight - Emerging economies able to withstand US slowdown (http://www.ft.com/cms/s/0/9aecd1aa-42d0-11dd-81d0-0000779fd2ac.html)


pacplyer:"its media propaganda, its only paper money, there is no oil shortage, save the oil for aircraft, subsidise the airlines". Are you communist? thats then sort of thinking they used and it destroyed communism.

[L-38]

Almost spot on, pacplyer . . . . With the loss of the gold standard, the Kissinger agreement of 1974 dictated that the USA would excusivly purchase their oil from OPEC, in exchange that all OPEC oil sold to the World would be exclusively traded in US dollars. Arabs in return would be allowed to become rich, but the World would be forced to stockpile / support US dollars (thereby feeding congress's insatiable deficit spending appetite). Only Iraq and Iran were not signatories to this agreement (and we now know what became of Iraq).

The American /Iraq war of support (and other American deficit spending) has cost billions $$ in future American money spent. The European Union on the other hand has a much tighter leash on it's membership's fiscal policies. . .therefore a weak Dollar vs. Euro. There is no free lunch. . . The Euro / Dollar imbalance is now translating into a very noticeable reduction of the American quality of life.

For America - repair the weak dollar and you will help restore normal priced oil in America.

[pacplyer]

Are you communist? thats then sort of thinking they used and it destroyed communism.


LoL!

Peter, we're not far in aviation from being destroyed right now. I'm not that far left actually. I'm a conservative Libertarian. I believe in capitalism as long as it allows for meaningful competition in the marketplace devoid of big oligopolies. But the oil market today has nothing to do with the principles Adam Smith laid out of meaningful competition in the marketplace creating "an invisible hand" that will self regulate supply and demand. I don't like big government, but big Fortune 500 mafias are even worse. The apparent collusion in the oil world to manipulate markets needs to be brought under control.

We've been down this road before with the big Trusts and Monopolies. Of course then, we had a good republican president who could balance needs of industry with needs of citizens: Teddy Roosevelt. That got us in the habit of breaking up big abusers like Standard Oil. One hundred years later, we seem determined to repeat history and let the "Big Four" robber barons again take over everything of value and power. I call this "Corporate Communisim: The misplaced belief that all power and wealth should reside in the hands of Fortune 500 CEO's."

I object to these unelected CEO's (unelected by the people that is) running the country from the boardroom. Most of the time they're just not very good at it. How do I impeach a bad CEO as a US voter? I can't. Hell, I can't even seem to impeach a bad puppet president.... :ugh:

Good post L-38, I think you're right. Any country that tries to flood the world with cheap oil, and who won't take worthless dollars for it can expect an aircraft carrier with ill intent to anchor offshore. Venezuela and Sudan may wind up on the radar the way they're going...

Hence my theory that part of our bigger problem is really one of banking (The fed is a private corporation that should not get a cut of every dollar the U.S. prints.) We've gotten rid of the central bank three times before and it just keeps coming back like a bad dream. The 1800's Rothschild Bank Baron's Grandfather said something like: "give me control of a nation's money supply and I care not who makes it's laws."

Of course environmental groups are probably happy as hell, they've been pitching high pump prices as a way to save the planet for years.... No one seems to care about elderly people in the northeast freezing to death since they can't afford heating oil.

Better add one more conspiracy to pacplyer's list there, Peter: Texas oil and environmentalists colluding to jack up oil prices....

Now if I just had some proof! ;)

[MUNT]

CNN its just broacasting that Qantas pilots are on strike!" Ahh, the US media, dribbling rubbish again. Engineers are taking industrial action, not pilots.

[pacplyer]

UAL and others are furloughing because of high oil prices. Is it temporary market supply and demand? Or is it planned government oil policy to bend to environmentalists?

Uh oh,

I might have answered my own question here......

The London Society is the world's oldest association of Earth scientists, founded in 1807... [their IICC commission] in effect, has bet the ranch, or rather the planet, on unplanned, market-driven progress toward a post-carbon world economy, a transition that implicitly requires wealth generated from higher energy prices ultimately finding its way to new technologies and renewable energy. (The International Energy Agency recently estimated that it would cost $45 trillion to halve greenhouse gas emissions by 2050.) Kyoto-type accords and carbon markets are designed -- almost as an analogue to Keynesian "pump-priming" -- to bridge the shortfall between spontaneous decarbonization and the emissions targets required by each scenario. Serendipitously, this reduces the costs of mitigating global warming to levels that align with what seems, at least theoretically, to be politically possible, as expounded in the British Stern Review on the Economics of Climate Change of 2006 and other such reports.


It goes on to say that gov policy makers give a lot of weight to the London Society. Skip down to Living on the Ice Shelf, and if you can wade through it, it's clear that Author Davis won't be happy until we are all grounded:

Tomgram: Mike Davis, Welcome to the Next Epoch (http://www.tomdispatch.com/post/174949/mike_davis_welcome_to_the_next_epoch)

Pilot groups need more pro-active lobbying of politicians to exclude public transport like airlines from oil company price gouging.

This is why I'm pro Union. Maybe Management and Unions can work together on this one. Give a management sanctioned PA asking SLF to lobby for exclusion of airlines to fuel taxes to impove safety. Hand out petitions.

What do you think?

[Re-Heat]

I object to these unelected CEO's (unelected by the people that is) running the country from the boardroom. Most of the time they're just not very good at it. How do I impeach a bad CEO as a US voter? I can't. Hell, I can't even seem to impeach a bad puppet president....
Carl Icahn seems to agree with you - The Icahn Report™ (http://www.icahnreport.com)

Pilot groups need more pro-active lobbying of politicians to exclude public transport like airlines from oil company price gouging.
Duh. There's no such thing as "price gouging". It is a lazy concept dreamed up by lazy politicians. It's a supply and demand-driven market!

[DA7X]

Could this happen?

Triple warnings this past week: the Royal Bank of Scotland fears a steep fall in the world stock market; the bank of all banks in the world, the BIS, Bank of International Settlements, in Switzerland, said that a worldwide depression is now a distinct possibility; Morgan Stanley, a leading American Investment firm, signaled similar pessimistic messages.

So what's happening out there? Frankly, all financial institutions are in deep trouble, and the reason is the American dollar. The situation is so dire that it's not going to make a hoot of difference who becomes the next president of the United States: it's beyond the power of the rulers of the American political and economic system to curtail severe damage to its entire economic enterprise. Neither Obama nor McCain can do anything to stem the disaster that will be fully employed by the end of this year.

Part of the cause is that the USA happens to be the most indebted nation on the planet and its people the least prepared to cope with peak oil and peak food. Even now Americans throw away up to 40 per cent of the food they buy, their high-powered and fuel-thirsty automotive park cannot be converted to more efficient vehicles for many years, while their exurban lifestyle makes car-sharing and mass transport impossible for most.

So what's so inevitable of the current monetary scene?

The world's entire Gross domestic product is some $50 trillion, of which the USA accounts for about $13 trillion. However, it owes more than $2 trillion to foreigners, of which Japan and China carry about half and Great Britain some 10 per cent with the remainder divided over many countries. Canada has less than one per cent. The American public carries $9 trillion in credit-card debt and even more in mortgages. Its national debt is close to $10 trillion while its Social Security and Medicaid has a future liability in excess of $50 trillion, burdening the average USA household with debt totaling more than $600,000.

And then there are the outstanding derivatives! They grew from $100 trillion 5 years ago to $500 trillion in 2007. Warren Buffet -- the world's richest man after Bill Gates and a most savvy investor -- wrote in 2002: "We try to be alert to any sort of mega-catastrophe risk, and that posture may make us unduly appreciative about the burgeoning quantities of long-term derivatives contracts and the massive amount of uncollateralized receivables that are growing alongside. In our view, however, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal."

Now, when everything that can go wrong is going wrong, this financial WMD, this weapon of mass destruction, is no longer latent but out in the open ready to kill the American economy.

According to the LEAP think tank, based in Europe -- subscriptions cost 200 Euro or $300 per year -- in the next six months all factors affecting the economy will converge, and create a perfect socio-economic hurricane.

The root of the problem is always money, basically the US dollar of which there are trillions too many in circulations, so many that its value is decreasing, and the world doesn't know what to do with them. It's this flood of money that drives up the price of all commodities, including oil, of course. Nobody wants more US dollars, unless its value increases.
But that can only happen when the US pushes up interest rates, which will cause the US economy to die within a few weeks, as the real estate market falls to zero by lack of affordable credit, interest on Adjustable Rate Mortgage loans skyrockets, drastically shrinking consumption, and corporate failures multiply exponentially and stock markets collapse.

No, higher interest rates are not the solution. However, to do nothing is not an option either, because soon nobody will accept U. S. dollars anymore.

Basically the US has lost the ability to govern its own economic policy. Thanks to its trillions of debts, it is now powerless to avoid disaster. No wonder banks are getting nervous.

The immediate consequence of America's economic collapse will be the end of the war in Iraq, because, suddenly, as the greenback disappears as the world currency, the US will be forced to live within its means. Since the war is the most costly of all its undertakings, the troops will abruptly go home.

Curiously the WMDs -- the weapons of mass destruction -- were not in Iraq: they are in the heart of America, right on Wall Street. Pity the veterans and the wounded; there will be no money to look after them -- no pensions, no jobs, no medical care.

Eventually a new financial system will emerge, but only after a period of tremendous turmoil and pain.

[pacplyer]

No gouging huh?

http://www.nytimes.com/2007/02/01/business/01cnd-exxon.html?_r=1&ei=5094&en=3692bbfc6cad7766&hp=&ex=1170392400&adxnnl=1&oref=slogin&partner=homepage&adxnnlx=1214569458-ZeWoOjbZIrByfsmpfCUayg

I wish my airline was also a "vertical monopoly" capable of doubling the fares and posting a quarterly ten billion dollar profit under the facade that: "It's just supply and demand everybody; can't help it!" But then, silly me..... We don't have airline CEO's in the administration......

Opec puts out only about 25% of world oil, but dictates prices to everybody. This is a free market? :yuk:

[peter we]

Good post L-38, I think you're right. Any country that tries to flood the world with cheap oil, and who won't take worthless dollars for it can expect an aircraft carrier with ill intent to anchor offshore. Venezuela and Sudan may wind up on the radar the way they're going...

Then you might want to add Saudi Arabia, Kuwait, United Arab Emirates and Qatar to the list of countries to threaten as they have, or are about to, drop the peg to the dollar.

Bloomberg.com: News (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a1Kmior169Jk)

Opec puts out only about 25% of world oil, but dictates prices to everybody. This is a free market?

Obviously OPEC do not dictate the price of oil. They were unable to manipulate the price when it was $10 (too low) and they can't do it now either.


You guys sound like you hate the US system of capitalism, you should rejoice, its how America works.

[Re-Heat]

Precisely - OPEC upstream is half the problem, but largely it is demand (see the bottom of your article where it mentions - "Production rose 4.1 percent to 3.65 million barrels of oil a day in the fourth quarter").

Exxon downstream (retail) makes little cash - hence them selling the petrol forecourt operations at the moment, and many other oil majors getting out of refining and retail operations.

Why would you want to be vertically integrated anyway? If you were an airline that owned Exxon - for example - if you could sell the fuel for a higher cost elsewhere, then you would do so - why would you sell at a lower cost to your own operation, lowering your own profits overall (unless you were trying to defeat all other airlines and create an airline monopoly - which would incidentally be illegal).

Gouging, or monopolising as it might be termed, would be indicated by falling production and increasing prices. We have increasing production and increasing prices.

Capitalism is brilliant, as pricing is doing exactly as it should - signalling a shortage and changing behaviours. You hardly want to end up as a communist planned economy with no development!

[pacplyer]

Good posts everybody. Economics is my weak subject so feel free to correct me on anything.

Opec influence: isn't that what a cartel really does? Manipulate price by adjusting output and coercing it's members not to sell below the agreed to price?

(Whether it's a drug cartel or an oil cartel?)

• CARTEL (noun)
The noun CARTEL has 1 sense:
1. a consortium of independent organizations formed to limit competition by controlling the production and distribution of a product or service

It's not a matter of loving or hating the 900 lb wall street gorilla. It's there and we have to deal with it. I just don't want to be under King Kong when he falls. But since most of my income is tied to the health of my airline it's getting pretty dark under his growing shawdow.... :{

enjoyed the banter.

pac - out

[OFBSLF]

What is wrong in the US, with that kneejerk laying off people.Simple economics. Fuel costs have almost doubled. Ticket prices need to rise significantly. As prices go up, demand falls. With less demand, United has to cut supply.

I've been laid off before and have great empathy for those being laid off. While I think airline management in general has been screwed up for years, United really has no choice in this matter.

[Re-Heat]

Yes, OPEC does control output and tries to be a cartel, but it does not by any means control all output - it has 66% of the reserves and 36% of production, so there is still significant scope for others to sell.

Furthermore, the largest problem OPEC - and all cartels have - are members cheating. Output of the 13 OPEC states is actually higher than their "agreed" output.

Yes, it is a contributor to high prices, but it is not by any means what has driven $140 oil.

[peter we]

The only OPEC member with spare capacity is Saudia Arabia. So they are hardly forcing prices up as they are over producing already. Demand will keep increasing (95% of Chinese don't own cars and price increase will only mildly affect public transport users, India car owners are already heavily taxed).
Oil Production hasn't increased in 3 years and it probably won't increase for a at least 5 years. Russia, for example, taxes oil so heavily that oil companies cannot afford to invest in new production. Other producers are producing less, e.g. UK is past peak and falling fast.

DA7X Could this happen?

Absolutly. The housing crash was predicted and described in detail 5 years ago in the New York Times.

Soros has been predicting it for years
MoneyNews - America's Money News Page (http://moneynews.newsmax.com/streettalk/soros_cries_wolf_again/2008/06/27/107961.html)

Its simple logic - perpetual growth is fundermentally impossible.

[L-38]

From peter we
. . Then you might want to add Saudi Arabia, Kuwait, United Arab Emirates and Qatar to the list of countries to threaten as they have, or are about to, drop the peg to the dollar. . .

Yes, dropping the dollar is inevitable as the camels' nose is now under the tent!
What will America do when the dollar invested nations of the world no longer tolerate America's reckless printing of money (printed mainly to finance expensive US political agendas - Iraq war, ect. .)?

America's fiscal recklessness may be history repeating itself. - Back in the 1960's, the USA had somewhat also printed money to help finance the Vietnam war. France in suspecting this, had called Nixon's bluff and demanded that French debt be paid in gold. The result was that Nixon then un-pegged the US dollar from the gold standard, and later replaced it with a kind of oil standard . . .(world oil to be sold in US dollars).

America (and mainstay dollar based economies) are now in for quite an economic ride!

[L-38]

The following text was taken from the press . .

"The next time you hear a politician use the word 'billion' in a casual manner, think about it.
A billion is a difficult number to comprehend, but one advertising agency did a good job of putting that figure into some perspective in one of it's releases.

A billion seconds ago it was 1959.
A billion minutes ago Jesus was alive.
A billion hours ago our ancestors were living in the Stone Age.
A billion days ago no-one walked on the earth on two feet.

A billion dollars ago was only 8 hours and 20 minutes, at the rate that the US government is spending it."

[pacplyer]

L-38 said:

Yes, dropping the dollar is inevitable as the camels' nose is now under the tent!
What will America do when the dollar invested nations of the world no longer tolerate America's reckless printing of money (printed mainly to finance expensive US political agendas - Iraq war, ect. .)?


My micro/macro economics is coming back to me now. I remember the professor saying that the answer was then to take it off oil and peg the dollar to Uranium.

The Royal Family will like this since they control what? >50% of the worlds Uranium mines? The U.S. now says it will switch to nuke energy in a big way (never mind the gov/subsity/huge infrastructure costs,) and already contractors are falling all over themselves to position themselves at the gov trough. Makes sense again, from a banker baron perspective, since here's a tightly controlled source of energy that can be manipulated price-wise to hook us on the electric grid (which we're woefully short of right now in the states.) So instead of petro-dollars going to the mid-east, we'll see "nuke-dollars" going to Africa? (Probably the only place left that will take them?) In exchange, those countries will be allowed to become rich as long as they agree to only take play money for their rocks.

But big oil's greed maybe delayed that sneaky little scheme. What's it going to take in years to build the new set of plants? Five-ten years? Nevermind, Uranium is already soaring.

You see, solar works good in the southern U.S. but we can't be extorted for that supply of energy. The source isn't containable and it's free.

It's all becoming clear to me now.....

[Ignition Override]

How terrible it is that most if not all of these same United pilots were already laid-off for 2-5 years or so. Good luck to United's junior pilots and those at other carriers here. I'm wondering which airlines overseas will want to lease their grounded jets (?), assuming that creditors refuse to allow a much lower lease per plane outside of another 'Chapter 11' filing.

I've flown with not only several new-hires lately but also numerous First Officers who were gone for several years and returned about a year ago. At various airlines many were tempted to not return while many others said "no thank you". One guy told me this week that he finished IOE only two weeks ago, but is reporting to Initial Training in one month on another aircraft which has almost disappeared from the operation. I can not tell the most junior pilots what is going to happen to them, but they must already know or at least suspect. The only question is when. Many might return to previous jobs knowing that so many regional FOs have far too little experience to upgrade for years.

Even FEDEX mgmt. has discussed the possibility of hoping for early pilot retirements in order to avoid their first ever (!) furlough of pilots-and they have been around since about 1973.
This is difficult to imagine, knowing the gigantic past success of Fedex and their "people culture".
They won't hire until at least 2010 due to a financial loss.

More than several small 'low-cost' US airlines are gone, and many more have swords hanging over their heads. Frontier just announced plans to park many jets. It is quite possible that few of the many small airlines have any real equity and have limited cash reserves.
Pilot groups and other staff at most US major airlines accepted such draconian pay cuts along with numerous benefit cuts that they will give no more.

The US has had a mortgage melt-down all over the land (due to ballooning interest rates recently), and the flooding around the upper Miss. River (barge traffic stopped) combined with increasing food/fuel prices will hurt airlines and other industries even more than most people realize.
A single military strike in the Arabian/Persian Gulf will spike fuel prices through the roof (I'm glad we have no SUV car-soon you will not be able to give them away).
The US has a good bit of offshore and other oil deposits, but various environmental groups exert large political pressure to keep it
out of reach-many using the extra excuse that it will take 20 years to extract much of it...

[Desert Diner]

Not the only aging fleet of midrange A/C, United has some 100 runout airframes, as does American.


The real problem with UA, AA, DL and NW is they are victims of their own sucess. They bought lots of then new planes in the past to fuel their grown and now they can't afford to run them or replace them.

[peter we]

The US has a good bit of offshore and other oil deposits, but various environmental groups exert large political pressure to keep it out of reach-many using the extra excuse that it will take 20 years to extract much of it...

GW Bush, the Republicans, Democrats and several previous Presidents have all banned offshore drilling. 'Environmental groups' don't pass laws.

pacplyer
My micro/macro economics is coming back to me now. I remember the professor saying that the answer was then to take it off oil and peg the dollar to Uranium.

The Royal Family will like this since they control what? >50% of the worlds Uranium mines? The U.S. now says it will switch to nuke energy in a big way (never mind the gov/subsity/huge infrastructure costs,) and already contractors are falling all over themselves to position themselves at the gov trough. Makes sense again, from a banker baron perspective, since here's a tightly controlled source of energy that can be manipulated price-wise to hook us on the electric grid (which we're woefully short of right now in the states.) So instead of petro-dollars going to the mid-east, we'll see "nuke-dollars" going to Africa? (Probably the only place left that will take them?) In exchange, those countries will be allowed to become rich as long as they agree to only take play money for their rocks.

But big oil's greed maybe delayed that sneaky little scheme. What's it going to take in years to build the new set of plants? Five-ten years? Nevermind, Uranium is already soaring.

You see, solar works good in the southern U.S. but we can't be extorted for that supply of energy. The source isn't containable and it's free.

A fast breeder reactor can manufacture new Plutonium, its not a scarce resource.

The world is not short of Uranium, neither is the US and its basically extremely cheap in any case.

You can't blame 'Big Oil' for the lack of nuclear power station - its the general public and Politicians fear of the safety issues after Three Mile Island.

And there is absolutely no hindrance to anybody, installing Solar power, except cost. The economic change has now made it viable. This has been 80% increase in installations last year, projected to be 80% again this year and probably every year from here on. Several companies are investing billions of dollars making new solar manufacturing plants. Qatar for instance, is investing $2billion.

Market Watch News (http://www.pv-tech.org/market_watch/news/)

[el #]

Great to read this, thanks to everyone.

I believe that as a society at large we're in denial of the "problem" and the diffused well-being of the Western countries will be seriously challenged.

Anyway I do not want to enter a sociological or economic rant, as I admit my essential ignorance on that.

I don't know in percentage how much we can blame demand/supply, weak dollar, or use of derivatives on oil.
I just wanted to point that today just as before, every investor from $1000 to 1 trillion is allowed to to speculate on the downturn by shorting stock, trading derivatives, or trading currency with a 400:1 leverage. All with the clear signals of a definite trend that has no signs of inversion whatsoever in the near future.

Pick your choice, travel/tourism, transportation, non-essential goods and services, just leave energy alone. You're more likely to make money being bearish on these than giving it to the sanctified names that will handle it the way you saw in recent news.

As a citizen (with some money) of the first world you're entitled to profit from the global information age, and play with almost the same tools like the big boys. A cynic act? Apparently profits made out of your money in this society don't require justification but only tax payments.

We even go to war to defend all this.

[pacplyer]

The world is not short of Uranium, neither is the US and its basically extremely cheap in any case.

Well, I'm no expert on grades of uranium needed to fuel a plant, but the argument made by opponents of nuclear power is that if we switched entirely to it for power generation in the U.S, all known world sources of it would run out in something like fifteen years. Crude was cheap at one time also, Uranium may be the next hot commodity (but who knows, maybe my professor had it wrong.)

You can't blame 'Big Oil' for the lack of nuclear power station - its the general public and Politicians fear of the safety issues after Three Mile Island.


Well I can't argue with that: Three Mile Island killed nuclear power, however, gov investment in alternative energy development has been practically non-existent when you compare it against the costs of a 300 billion dollar oil war to keep us topping off at Exxon. That kind of money could have been spent in a variety of better ways, like re-tooling detroit to produce efficient mpg technology or developing more efficient solar techs.

Texas is big oil. Bush was ceo of an oil company and Cheney ceo of oil infrastructure support co haliburton, so I can and do blame big oil greed for the misdirection of U.S. energy policy. The influence, for example, of oil company ties to this administration’s decision not to increase federal mpg standards or lower the nations speed limit has had a huge impact on consumption and hence it’s demand. The decision not to build any new refineries (e.g. in California) the last twenty years causes a bottleneck that defies gravity and keeps avgas and car gas prices artificially high and not in concert at all with the actual oil market.

Exxon alone made over 40 billion dollars profit last year. Why isn’t more of this put into exploration? The South China sea is rumored to have more oil under it than Saudi Arabia but there’s no political will to strike a compromise with china and do more test drilling in those disputed waters.

Some see market coincidence, whereas I see gov and big oil in unholy collusion trying to robb what’s left of the middle class. Cheers.

pac "park the toys" plyer

[Goldfish Jack]

DA7X

U could not have said it better - we read about these experts telling us what is wrong in the world, but u hit the nail right bang on the centre of the head>

The new system will emerge but it aint gonna be easy and we all need to make sacrifices to get there. Only the strong and those that can plan properly and buget and adapt will survive

[NZScion]

Why do we continue to have oil priced in US Dollars? Why not GBP or EUR? Surely that would bring stability at least to prices?

[Ignition Override]

Peter We:

On second thought, true,
It has been a bipartisan long-term process.

I stand corrected.

[peter we]

Well, I'm no expert on grades of uranium needed to fuel a plant, but the argument made by opponents of nuclear power is that if we switched entirely to it for power generation in the U.S, all known world sources of it would run out in something like fifteen years. Crude was cheap at one time also, Uranium may be the next hot commodity (but who knows, maybe my professor had it wrong.)

Its a false assertion, there is more Uranium than we will every need and Fast Breeder Reactors produce more fuel that they consume.

Nuclear Fusion is another level altogether. One Kg of water will produce the energy equivalent to 10,000,000kg of coal with far less radioactivity than Fission. You will be pleased to hear the US government tried its best to delay the building of the prototype rector in France (which is still 15 years away)


Well I can't argue with that: Three Mile Island killed nuclear power, however, gov investment in alternative energy development has been practically non-existent when you compare it against the costs of a 300 billion dollar oil war to keep us topping off at Exxon. That kind of money could have been spent in a variety of better ways, like re-tooling detroit to produce efficient mpg technology or developing more efficient solar techs.

European Governments have been and are investing in renewable (15% by 2020 is the legal target). The US government seems to be incapable of planning for anything - its dogma.

Why do we continue to have oil priced in US Dollars? Why not GBP or EUR? Surely that would bring stability at least to prices?

Many answers for that.

Its priced in dollars for stability and convenience.

Until 1945 all commodities were priced in British Pounds, however the UK was bankrupted by the war and needed a loan. The US offered a loan with the additional condition that the UK gave up pricing in pounds and switched it to the US dollar. The British pound then started its long collapse (from $5/£1 to almost $1/£1) in the decades that followed.
The Dollar as the worlds reserve currency has massive advantages - the US can print as much paper it wants and swap it for real commodities. It can borrow at the best rates and benefits for masses of paper held around the world.
The US, however has completely blown it by abusing its position (borrowing and spending). There is now viable alternatives to the Dollar (Euro) and countries can switch. Iraq switched to the Euro before being invading and being forced to switch back to the Dollar. Iran switched to the Euro and is now under threat of invasion. That is how serious the threat and importance of the Dollars position. You can't invade everywhere and the problem is so bad even Kuwait has dumped the dollar - other oil countries are looking to do so.

Its my opinion that the jump in oil price and 100% rise in commodities is hidden devaluation in the dollar by countries with currencies linked to it. Paper dollars have lost half their value and therefore only worth half the weight of oil, copper or food etc.

A switch to the Euro or a basket of currencies is probably going to happen because of the American mismanagement. How low the dollar and how high oil goes before that is anyone's guess, but it will be very, very messy.

[peter we]

Ignition Override

On second thought, true,
It has been a bipartisan long-term process.

I stand corrected.

And its the smartest thing your government has done on energy security- its better to leave the oil in the ground for future use. The excuse of 'environmental concerns' is a smokescreen that allows both sides of the political spectrum to blame the other and feel good about it. Off shore drilling has been very clean for decades and nothing like transport oil by sea tankers and the hazards they cause when sinking.

[CONF iture]

Goldfish Jack, DA7X,
Do not speak the truth, people are not ready yet and corporate media don't want them to wake up either.
Ron Paul (http://video.google.ca/videoplay?docid=4009744953602525183&q=ron+paul&ei=Ih1pSLAEiKb5Aaud5KoP) has been blacklisted before being simply ignored all along during the primary ...
Let's go on with Oballary McBush, and keep the American Dream and/or Lie alive !

[Muizenberg]

An utterly useless management team have destroyed UAL. The costliest Chapter 11 filing ever...Execs filling their pockets while workers of every work group have made Tilton's "shared sacrifices"...Funny how the same old faces keep appearing---thought the ex Sr VP Onboard Service was suppose to retire in 2001, after Jane Allen was brought in. The ex Sr VP Onboard is now Sr VP HR, and still at UAL...

Under Greenwald UAL was a fantastic place to work, filled with pride and enthusiam and new ideas...a big change from the days of Wolf when I joined. The cycle of decline started with Goodwin who wasted so much money, has continued with Creighton and Tilton.

Good luck to all of you, I got out 5 years ago. Just couldn't turn into one of those Pan AM-esk F/A's who constantly banged on about how they earned more money 10 years ago.

Worst Airline Management Ever (http://www.unitedafa.org/news/pdetails.asp?ID=614)

[pacplyer]

ts my opinion that the jump in oil price and 100% rise in commodities is hidden devaluation in the dollar by countries with currencies linked to it. Paper dollars have lost half their value and therefore only worth half the weight of oil, copper or food etc.

A switch to the Euro or a basket of currencies is probably going to happen because of the American mismanagement. How low the dollar and how high oil goes before that is anyone's guess, but it will be very, very messy.

Thanks Peter,

i personally, agree with everything you posted. It's going to be ugly.

Cheers mate,

pac

[OFBSLF]

Exxon alone made over 40 billion dollars profit last year. Why isn’t more of this put into exploration?

ExxonMobil and the other majors are putting billions of dollars into exploration. Unfortunately, the easy oil has already been found. Also, it wasn't long ago that oil was going for $20/barrel -- at that price it simply wasn't economical to exploit many of the harder to reach oil fields. You can't just snap your fingers and find more oil. Drilling rigs are in very short supply. Offshore oil platforms take a long time and a lot of money to build.

Lots of folks like to blame the big oil companies like ExxonMobil. But the reality is that 80% of the known reserves are controlled by national oil companies (e.g., Petrobras, Petroleos Mexicanos, etc.). ExxonMobil's share of the world market is in the single digits. Even if they doubled their production tomorrow, it would have a negligible effect on the world market.

The reality is that oil production is down in many countries, including Russia, Mexico, Venezuela, Iran, and Nigeria. In Nigeria, this is due to civil unrest. In the other countries mentioned, this is due to aging oil fields, mismanagement, and under-investment.

In the meantime, demand is skyrocketing in developing nations like China and India. China is now the second largest car market in the world.

With the demand up and the supply down, the price goes up.

[peter we]

The reality is that oil production is down in many countries, including Russia, Mexico, Venezuela, Iran, and Nigeria.

Most of which are not investing in new capacity, because there simply isn't any incentive.

Iraq is; however there is going to a be a **** storm when the Iraqi's realise that the oil ministry have used Saddam's laws, bypassing Parliament, to hand contract's to Western oil companies. Contacts that have been written by US government lawyers.

[L-38]

Assoc Pr 07/01/08 - "Bush signs $162 billion wartime spending bill"

That is - $162 billion of future money that Americans can not afford and/or do not have.

Watch as this action translates to a further devalued dollar . . which in turn will translate into pricier American imports -oil, . . and an even more expensive American standard of living . . which will in turn translate to more hardships for America's airlines.

[OFBSLF]

Most of which are not investing in new capacity, because there simply isn't any incentive.

Iraq is; Iraq is up to 2.5M barrels per day, which apparently was its pre-war production. I've seen one estimate that Iraq production could reach 6M barrels per day in several years.

Given that world oil production is about 85 M barrels per day, I don't see that an extra 3.5M barrels per day from Iraq 5 years down the road is going to make much of a change in the world market for oil.

[A320AIJ]

Sorry to ask this question, but where are all those pilots of american carriers who had lost thier jobs going?
Cause these guys are pros with a lot of experience, too many flying hours.
Do they consider the posibility of getting a job out of the USA?
Ít´s just a question.

[peter we]

Iraq is up to 2.5M barrels per day, which apparently was its pre-war production. I've seen one estimate that Iraq production could reach 6M barrels per day in several years.

Yes, that was in 2003, production was supposed to get to 6M bpd several years ago, but it hasn't. Its like those 'contracts' that western oil companies are supposed to have signed, political propaganda on behalf of the Republican party.

[tsgas]

The dummies in the U.S.of A driving their high powered S.U.V.'s at 150 kph are going to feel the pain of their flawed ways.
High powered S.U.V.'s ,high powered boats, hugh R.V.'s waste valuable oil and now they are going to pay at the pump.
The airlines were also stupid in having 10 departures to the same destinations within minutes of each other. This created gridlock and huge losses.
"The times they are a changing."

[saviboy]

hi
can somebody come up with an rough estimate on the ratio of a320 qualified who are gonna be laid off?

I am 320 qualified soon to be laid off. just want to know if I will have a lot of competition form united guys

Good luck to all

[ShortfinalFred]

Good luck to all furloughed. This oil crisis is like no other - this time there will never be a return to "normality". From here on in its extreme poverty for millions in the developed world.

As to the airlines, I may hate the cynicism of Wee Willie Walsh who runs BA but his droll remark that airlines are not built for $150 dollar oil is straight to the heart of the matter. If this situation lasts or worsens, then the great majority of the worlds airlines are finished, utterly gone.

In the U.K. I guesstimate a return to levels of poverty seen at the end of WW2: grow your own food, run a wood burning stove and cycle to Bogner Regis for your holiday - it will get that bad and worse - our inner cities are already collapsing, with five knife deaths among London Kids in a day recently.

Above all, wannabes dreaming of an airline career - dont do it, unless you want to see your hopes and dreams for a life die a thousand deaths.

[B772]

Looking at the financials for UA I would suggest they are heading for another Chapter 11 event and possibly Chapter 7.

[peter we]

There will be no re-financing, they will have to be taken over or closed. Thats the only options.

In the U.K. I guesstimate a return to levels of poverty seen at the end of WW2: grow your own food, run a wood burning stove and cycle to Bogner Regis for your holiday -

Sounds great, doesn't it?

However, the airline industry is not going to disappear. Those with the most fuel efficient aircraft and with some protection from the US dollar will survive. There will have to be some severe capacity reduction for the reduced levels of travel, but I doubt it would be more than 50%.

[LindbergB767]

I just read last week that if the American were using their coal and transforming it in oil they would have oil for 250 years (as the South African are doing now)
The problem is that the governement of USA, Bush, Cheney and Rice are so connected with the oil industry they d ont want to do that
Also there is some Cie now in USA who developped a project with Algae ,and if they were really pushing with those project by using 1/10 of Nex Mexico, with those project (as an example) USA will not need to buy any oil anymore
May be true???

[peter we]

Of course, convert coal into an extremely polluting alternative to oil instead of using the oil we have more efficiently. Right...

If the US car fleet had the same average fuel efficiency of Japan that alone would save 5million barrels per day and bring the oil price down to $50.

[OFBSLF]

Coal gasification is not new. It was used in the 1800s and early 1900s to create gas for lighting. Fortunately for Mrs. OFBSLF, who is an environmental professional, old manufactured gas plants are serious hazardous waste sites and will keep the Mrs. busy for decades to come -- and these are sites where the gas plant was shutdown more than 80 years ago.

And coal mining itself is not exactly environmentally friendly either.

I'm not saying that we shouldn't look at coal gasification. What I am saying is that it is likely to be expensive to do it in a way that doesn't create a very large mess.

[EXLEFTSEAT]

You know, depending on the age, we are gone a long time. TW/PA/BN/EA, forget about it. You will find more of us at the local pool store than in the air. I don't like to reminisce because it brings tears to my eyes ( yet, it shouldn't, but I can't help it ) but our experience can never be brought back. On the other hand, we had different airplanes and we had a different working attitude. Airplanes were evolving. We felt privileged to fly, didn't feel like a right. But also the pax behaved in a different way. You know, it's just a very, very different world now.And a very, very different world doing business now,
Rickenbacher and Trippe and all the other aviation pioneers are gone. Now the bankers and the financeers run the business. It's a very different world!!!

[ShortfinalFred]

No Peter, the airline industry wont quite disappear, but very nearly. The UK is uniquely in trouble - a balance of payments deficit of 5% of GDP = a probable 30% decline in the pound yet to come, so that'll be at 88 Euro cents to the pound and $1.37 dollars to the pound. This will drive inflation through the sky as we are now a net oil importer and yet manufacture almost nothing to export.

Outside of the 100 square miles around London, one in two people receive some kind of state benefit. One in four UK jobs is on the state payroll. This is INSANE - we are truly doomed. I think it would be wise to have a fall-back plan to get out of the UK.

What is left of the UK airline industry will be a remnant, just that, the tatters left. In the US I dont know - perhaps two global network carriers will remain.

Oil may pull back but the trend is to the sky and beyond - pun intended. Very little airline travel will survive this. For us in the UK, we are heading back to the worst aspects of life in Britain just after the war - for many, very nearly abject poverty. Utter economic incompetence has got us there, along with a healthy dose of complacency

EU Shorthaul flights are doomed by the impending EU carbon tax, which rail will not have to pay, let alone the fact that, in the UK mass unemployemnt and social breakdown are just around the corner - leaving very few customers for most UK airlines.

UK banks trade on P/E ratios around 3.9 - this too is unprecedented. We are looking at possible economic collapse, and the Feds' near nationalisation of Fanny Mae and Fanny Mac is but a possible prelude to outright meltdown. Airlines will never be the same again and life will change for most of the middle and lower class for ever. I repeat - people will be growing their own food and cycling to Bogner whilst spending the winter shivering around the wood burning stove. It is going to be that bad. If you've got a storage heater and some spare Euros, go to France - at least they have nuclear power!

Wannabes - its tragic, but your dreams of a life in flying will be just that - dreams. Assuming you do make it, you'll see your hopes of a life dashed a thousand times as each wave of the oil shock breaks and prices head to the stars and your hopes fall to the weeds. This is the end of an era and the start of a very painful decline for the western way of life. I dont think people can face the reality of what is hitting us.

On thread (!) I am desperately sorry for those furloughed and hope they can rebuild their careers and lives. Wannabes taken note - despite everything you do to build a successful career and stability for your family, this economic tsunami makes a career in flying little short of insanity.

[peter we]

No Peter, the airline industry wont quite disappear, but very nearly. The UK is uniquely in trouble - a balance of payments deficit of 5% of GDP = a probable 30% decline in the pound yet to come, so that'll be at 88 Euro cents to the pound and $1.37 dollars to the pound. This will drive inflation through the sky as we are now a net oil importer and yet manufacture almost nothing to export.

You can make up figures to back your argument, I going to say bull****.

EU Shorthaul flights are doomed by the impending EU carbon tax, which rail will not have to pay, let alone the fact that, in the UK mass unemployemnt and social breakdown are just around the corner - leaving very few customers for most UK airlines.

Yet the road industry, which pays far, far higher fuel taxes has survived. And Trains pay taxation on their energy use, its airline which have been given a free ride.

We had a much worse situation in the 1970 and nothing like what you describe was evident. Airlines will get more efficient aircraft, recalculate their business models and will continue. If they don't, train travel provides a excellent alternative as air travel as never been a necessary.


If you've got a storage heater and some spare Euros, go to France - at least they have nuclear power!

So does the UK, and its building more in future. Removing planning approval requirements will speed it up - harsh but we are in a energy crisis. And the UK has more wind and wave power potential than the entire western Europe combined.

[ShortfinalFred]

Peter Wee - take a long look around in the glaring light of the new recession - I think you'll find that this is more than just a rise in the cost of asparagus, and as I said, its not me saying "chicken little style" The Sky Is Falling - its Wee Willie Walsh. "Airlines are not built for $150 a barrel oil", to paraphrase. Extreme change will occur. Things are going to change more than people bargained for and I see extreme poverty ahead for many, not that that pleases me in any way at all.

Once again - good luck to all furloughed or laid-off in this third great oil shock.

[B772]

With 7 months of the year behind us and seeing 7 banks and 7 airlines in the U.S collapse it will be interesting to see who is next.

[layinlow]

Sorry there Lindburg but you have it wrong. It isn't George and Dickie show, that is keeping the shale from being mined and converted to oil. It is the Democrats. Bush 1 proposed the mining of shale back in his administration, just prior to Clinton who took over the reins. It was Clinton who stopped any exploration, along with ANWAR's desolation (pristine my ass, I've seen the place, ugh).
It has been said that environmentalism is the last refuge of communists and given the global warming hoax (can you say carbion tax?), I tend to believe it.
This oil problem is the same thing we had it the 70's and it the same arguments and mistakes are being made. Mark my words, our vaulted government is going to do something really stupid and welcome to the gas line and rationing. The airlines, of which I have 30 plus years is going to suffer big time and there will be a lot of good people walking the streets. For what? A bunch of stupid politicians in their castles in Washington. It is a shame.

[Ignition Override]

Layinlow: Good points up there.
As for the carbon stuff, it still escapes me as to how/why Senator Al Gore won the Nobel Prize. So he sold his fuel-gulping SUV and now rides a bicycle to work? Yep-I missed that news. Need to read the wire services more carefully. Maybe "the Economist" covered this profound example.

That's right, those chumps truly believe that he invented the Internet, as Al once vaguely suggested here!
Paradoxical, but with all the weapons exported from there over the years (i.e. "Saab Bofors Dynamics"), but nothing done directly for the people in Iraq by so many countries, the others who are not there (on the ground) can still preach something about peace.

Not doing something noteworthy right now, measurable-in the physical sense, on the ground (building/repairing hospitals or schools)-is much less important than preaching abstract theories about the worlds' "underdogs" (suffering masses) and awarding prizes.
Preaching about Pres. Bush's actions (though I'm not much of a fan either) or mistakes produces much more traction (like tyres on a dry road) with the media, and is much more respectable/chic, than correcting any of them, for example (zum Beispiel/por ejemplo) building things to make their lives better.
Correct me if this paradoxical hypocricy is not the situation.

Any news from United's MEC?