Growing Evidence That The Upturn Is Upon Us

[Wee Weasley Welshman]

The 1970's saw three day weeks and my Grandad milking the cows by candlelight because the miners had shut down the power stations - no, we're not quite there.

Unwinding all this debt though will take years and prosperity in terms of spending power will not return to 2007 levels for at least a decade. The days when borrowing £75k to spend on flying training felt normal will not return for quite some time. Perhaps this is a good thing.


Airline losses in 2009 are going to be horrendous. 100% guaranteed.


WWW

[Lurking123]

Many business losses in 2009 are going to be horrendous. 100% guaranteed.

This problem is by no means unique to aviation.

[Re-Heat]

FT.com - Southwest’s loss
Published: October 16 2008 14:53 | Last updated: October 16 2008 20:40

Ask any gambler – on the way up its all about skill, on the way down its damned bad luck. So how should the results of Southwest Airlines be treated? On Thursday, the group reported its first quarterly loss in 17 years. The only investment-grade US airline, and one of the few actually to make an economic return, Southwest reported paper losses due to the fall in the oil price – marking-to-market the group’s fuel hedging arrangements produced a $247m charge.

If that is treated as an exceptional item, then Southwest made money. But it points to a big problem ahead for the airline. The group began hedging in the late 1990s and it has been a competitive advantage ever since as struggling peers lacked the credit quality to pursue a similar strategy. The effect on profitability has been dramatic; this year alone the group has saved $1.3bn on its fuel bill so far. In fact, were the help from fuel hedges to be excluded, the $4.8bn in operating profit Southwest has generated since 2001 would fall to just $500m.

That edge on costs is now gone. Southwest has locked in an in effect rate of $73 per barrel of oil for three quarters of its 2009 fuel needs, above current prices. Furthermore, with some hedging in place at $90 or more, a further cheapening of crude could prompt margin calls – which has caused the airline to draw down pre-emptively $400m of a revolving credit line.

Some advantages remain. The group’s point-to-point model is inherently more efficient than peers based at big airport hubs. Nor is its balance sheet weighed down by debt. But the rest of the industry has been forced on a crash diet due to bankruptcies and spiralling fuel costs As the recession bites, Southwest needs to prove that it has not just enjoyed the blessings of lady luck.

[ChrisLKKB]

spending power will not return to 2007 levels for at least a decade.

I don't think we want the spending power of 2007 levels ever again, not unless it's backed by hard cash and I can't ever see the average wage reaching sufficient levels to enable that to happen.

I also think we are witnessing the beginning of the end of the 70K loan for flight trainning and the many of the wannabees in the system or those about to join it, in time are going be yet more casualties of the 'credit crunch'.

I can't see banks being willing to make wreckless loans of this magnitude for a very long time once they start seeing the dozens, maybe even hundreds of defaults that will inevitably start to occur over the next few years.

If the boom when it happens turns out to be as big as some are predicting, this may well leave a gap in the market....enter airline sponsorship in the shape of the MPL.

[Grass strip basher]

All this and yet there are still people on threads not too far from here asking how they can get themselves into £70k-100k of debt to join at the back of a very very long and growing queue of people with both a frozen and un-frozen ATPL looking for jobs..... I hate to be rude but I am gonna be anyway.... some folks are just f**king stupid..... but I guess people like that with such a lack of financial sense are a large part of the reason we are in this mess anyway..... I despair sometimes.

[Alex Whittingham]

I seem to recall the reason we're in this mess is largely down to the activities of the financially sophisticated 'experts'.

[Grass strip basher]

I wouldn't believe everything you read in the press Alex.... we are in this mess because the everyday man in the street have borrowed too much money and is now less likely to pay it back. This is causing house prices to fall in the US etc etc... this is then impacting things like the CDO market. That is why money markets are frozen too much leverage everywhere including households.

The political answer is to blame the city as it doesn't cost votes. Did you know banks were 40% of total UK corporate tax takings for the government? thats a big hole to fill. Funny that.... the wanabee that is 70k in debt and defaulting on his loan is sat next to the the BTL investor and others who shirk responsibilities they signed up to and they sit at the root cause of this crisis.... it is these loans not being repaid that creates the huge losses for the banks.

[spinnaker]

Thought I would post this here, although posted on another forum, I'm sure you will agree its relevance. Sir Richard Branson (http://www.foxnews.com/video2/video08.html?maven_referralObject=3146954&maven_referralPlaylistId=&sRevUrl=http://www.foxnews.com/story/0,2933,437001,00.html) on Fox News. He mentions the Great Depression more than once. And he also says that if HBOS went down, so would Virgin.

[Alex Whittingham]

There's greed everywhere. I think it's a bit rich to blame Joe the plumber for taking out too big a mortgage when it's offered to him, though.

The charge 'a lack of financial sense' could be levelled at banks offering high LTV mortgages (did they think they boom was going on forever?) to governments unwilling to regulate to slow the boom (some did - in France you can't get a mortgage if the repayments exceed a third of your income) and to financial institutions who can't identify the extent of toxic debt they hold (how stupid is that?) and use financial instruments so complex that very few can understand the debt they hold (also, how stupid is that?).

It's notable that the financially sophisticated are very good at identifying a trend but seem incapable of spotting when a trend is about to reverse, just look at the 'experts' who were forecasting oil at $200 a barrel by Christmas. When the market is going up, oh, it's going to go on forever and when it's going down, oh, it's going down forever. It seems to me a child with a pin could do better.

[helimutt]

Interesting times ahead. I applied to LloydsTSB for a mortgage last year. I needed to know how much I could borrow with my present income, then with my new 'pilot job' lower income, and also adding in the wifes income to the equation. We would be able to borrow, jointly, £325,000 on a 100% type repayment mortgage. Needless to say we didn't take that much as our joint income at that time was approx £65k, and we thought we might just be pushing it a bit.
Why would a lender be so stupid? Greed? We had A1 credit scores from paying back loans etc over the years. I guess that helped, but many people are going to be in a whole world of sh*t soon.

Luckily we borrowed just what we needed (less than half) but even now I still feel it is a lot of money, regardless of the fact I spent £110k getting my present job if I add in everything on the way.

I can only advise anyone even thinking of borrowing any money right now to have a serious think about things and wait a year or two at least! I know it all sounds so harsh to come onto a pilot forum to be told don't bother, but I think that for once, the best bet is to maybe take the advice being offered on this thread very seriously. Sorry we can't be more positive.
:(

[Wee Weasley Welshman]

I think the public for borrowing, the banks for lending and the government for turning a blind eye can all be apportioned blame fairly evenly. The public have the defence of being a bit thick, the other two do not.

The Machiavellian side of me think that in both the US and UK the government of the day calculated a change of administration was likely and thus the bursting bubble would be the-other-lots problem so they let the bubble grow. I wouldn't fancy George Osbornes job of sorting out the public finances of 2010 - 2015. Would you?

It is possible to celebrate rather than lament the US/UK/Wests prediliction for boom and bust. Creative Destruction is real. Hosing money around does ensure that some is sprinkled on wacky but worthy new businesses. Google probably wouldn't have got going were it not for the promise of millionaire making stock options prevalent during the tech bubble.

Whatever. We are where we are and the graph I posted above shows that we are somewhere we haven't quite been before. There has never ever ever been a credit and asset price bubble like we have spent the last decade living through. Its new. Its new in both scale and in breadth. If we are to return to historical norms we will have to have GDP shrinkage of around 6% per year for 2 years and then stagnation/low growth for a decade.

That would be deeply horrible. Perhaps it won't happen. I suspect it will though.

If you look at the the CAA statistics there were 1146 new CPL's issued in the year to August 2007 (over a year out of date I know). That is the sort of scale of competition that the Wannabe is up against. Plus redundancies. Plus foreigners who speak English and hold JAA licenses.

The figures for Professional License Issues and Renewals per year shows:


Year
-----
06-07 5384
05-06 5362
04-05 3434
03-04 2775


The statistics are not detailed nor consistent enough to draw definitive conclusions. Nevertheless it looks very much as if the last 3 years has seen a tidal wave of people going through the training system. Were this to fall back to 03-04 levels then the flying training industry is going to shrink by close to half.

Be careful out there and unless you are a window licking loon DO NOT borrow vast sums of money to fund training unless bankruptcy suits your circumstances.

Which is very well might.



WWW

[99jolegg]

I agree with WWW's first paragraph. A lot of the time, the general public are blamed for borrowing too much, which is strictly true but it suggests that there is a money pot from which the general public have free reign and can take as and when they please!

In fact, the bank with the financial knowledge gave them the option to borrow that amount. I'm sure the bank manager or mortgage / long term liability advisor would not be giving those loans out without consideration from the bank's risk assessment team, therefore, it has been decided by those that run the bank and assess the risk, that the general public can have those loans despite the risk that this will carry in the event of a downturn, therefore, to me, they are primarily responsible! They knew the risks but dished out the credit anyway. Of course, the poor punter that signed on the dotted line to say "I understand the above" clearly didn't have those risks conveyed to them!

In short, it doesn't seem unreasonable to suggest that the banks put a sniff of financial return above the welfare and ethical aspect of lending to those that in all honesty, couldn't afford it.

It's like a dietician giving a child a lot of sweets and then blaming the child when their teeth rot...

[Grass strip basher]

The "poor stupid punter" line is just b*llocks..... that sort of excuse is at the centre of what is wrong with society today.... IF YOU BORROWED THE MONEY TAKE SOME BLOODY RESPONSIBILITY FOR YOUR ACTIONS!!! Why is it always someone elses fault???

... making excuses for what was plain old fashioned greed on behalf of the borrower.... whatever next :ugh::ugh:

[Alex Whittingham]

Yes, but you have to add in to your condemnation:

'and greed on behalf of the banks, and greed on behalf of the bankers chasing bonuses and commisions, and dishonesty (naked short selling) and a desire to stay in power to the detriment of the country on behalf of the politicians'

It was a team effort.

[99jolegg]

For you, your family and friends, it may be stupid. And if I borrowed money, no I would not rely on the bank to tell me everything, indeed I'm sceptical of anything when it comes to finance so I would do every last piece of research possible to ensure it was sound.

There are always two sides to the coin, and whilst I don't want to aggravate your apparent hypertension :E....

IF YOU BORROWED THE MONEY TAKE SOME BLOODY RESPONSIBILITY FOR YOUR ACTIONS!!!

IF YOU LEND THE MONEY, TAKE SOME BLOODY RESPONSIBILITY FOR YOUR ACTIONS!!!

... making excuses for what was plain old fashioned greed on behalf of the borrower.... whatever next :ugh::ugh:

Likewise, making excuses for plain old greed on behalf of the lender, whatever next. The banks were greedy; they lent to those they knew would probably not afford it. More to the point, they lent amounts to those they would not even consider borrowing themselves.

I'm not arguing with you or saying you're wrong - just providing the other side of the coin for some people...

[ford cortina]

While I agree that the Banks have an awful lot to answer for, Joe public must take some responsibility. You only have to watch the Bailiff gets his own back shows on Dave and other sat channels to see how irresponsible people have become. It's not just the stupid ones either. There has been for too many years a culture of buy now worry about it later.

Credit cards, store credit and loans are relativity new to the UK, Credit cards came in the late 60's I think, with Barclays being the first issuer. We have embraced a world where we want large plasma tv's, better cars than our neighbours, designer clothes, names on everything and we want it now.

Our grandparents and for some of us, parents would have saved dammed hard and then thought about spending we cannot be bothered and must have it now.

I have a Ipod, the photo model, when I bought it 3 years ago it was cutting edge, now I keep getting told that I need a new one at £200.00 why? it works well, sounds fine and has caused me no problems whatsoever, but it is old and not as cool as the new one so I should spend money just to look trendy.

My niece's parents have a perfectly nice house, but they went ans spent £80K on an extension INSANE, they have has at least 8 cars in the past 8 years, all on HP, all nearly new. Their current motor is a Audi A3, it's newer than my BMW Coupe so it must be better! She has a basic Neff oven but as it's newer than my Miele, which I bought in a liquidation auction along with the whole kitchen, it is better WHY.
Until we can curb our desire to have it right here right now we will never change, as WWW said there are 18 and 19 year olds on other threads trying get £60-90K and if you offer words of caution, sod you, you don't know anything.

I had a flying lesson when I was 15, I first went on a flight deck when I was 11, it was a JAL 747-100 on the way to Japan, the old way over the pole. I spent an hour on the flight deck and realised that was what I wanted to do. I did not get behind the controls of a aircraft again until I was 33, doing my PPL here I am 5 years later with a job on 737's. In Africa, earning good money and enjoying it. My debt, although I do have some, is manageable and will be clear within 18 months (£20k ish).
My point, well I saved and waited, worked bloody hard and now am reaping the rewards. I might even buy a Boxter S next year, unless my Fiancée wants a Volvo XC90.
Rant over.
Good flying and good luck
FC:ok:

[hollingworthp]

The banks of late forgot that their remit was to manage risk but the senior managers all seem to be of the product-sales school of thought so they have plenty to answer for.

The branch bonus systems testify to such corporate policies.

[ChrisLKKB]

Sometimes I despair. Trying to shift blame from the borrower to the banks is ridiculous and the analogy of handing a child sweets one of the daftest things i've ever read.

We're talking about adults here, not children, adults are legally obliged to take responsibility for their actions, children aren't. That's why banks don't lend money to children.

There is plenty of information available on the cost of living, now more than ever. Anyone taking out a loan has a responsibility to find out exactly what it will cost them, what the cost of living is and what will happen when their discounted rate ends Whether it's from the internet, work collegues, family or even the bank itself, the information is out there and it's free!

Of course there are some halfwits out there who can't think beyond the end of their flat screen tv hd dvd cinema system but banks can't be expected to spot them from the genuine man in the street but to soley blame the banks for doing their job, making as much money for their depositers and share holders is wrong.

Stricter regulations are required, not less or more lax regulation. It may mean the banks aren't able to extract every last penny from those who are genuinely able to pay their dues but it will significantly reduce the number of people getting mortgages who can't rather than leaving the rest of us to suffer the consequences of fools.

[JohnRayner]

It's like a dietician giving a child a lot of sweets and then blaming the child when their teeth rot...Except the child conceivably might not be able to understand that lots of sweets= tooth rot.

Whereas an adult should be able to assess their own money needs, and their ability to afford any debt they take on.

The "no-one told me I was going to get into trouble if I did this" legion (and in GB circa 2008 they ARE legion!) really get on my pecs, pardon my french.

Just like that couple on the debt re-structuring loan ads (strangely absent right now!) bimbling round their big house playing with their expensive toys while negotiating their subsequent penury over the phone with nice guy from loansdirect who "really just wants to help" and "talks to us like we're grown ups..."

AAAAARRRRGHHH! :ugh::ugh:

Incompetence, greed and stupidity on ALL fronts methinks, coupled with a FSA that has freely admitted to being asleep at the wheel during the build-up to all this.

Apportioning blame at this point is certainly satisfying, but ultimately pointless. The wave is upon us, there seems to be no way out, all that remains is to batten down the hatches, tie ourselves to the mast and hope that when the storm dies our respective boats are still afloat. Don't forget to apply life jackets to the ones you love!

To extend the mettyfor a little further, now might not be the time to unfurl all sails and set out for a distant shining shore, as you will almost certainly be dismasted in the process, founder, and sink to the bottom of the briny deep.

See what I did there? Well, I thought it was good..

I think we really are heading for times where it isn't unreasonable to wish everyone good luck for the financial future.

Regards

JR.

p.s. While having little sympathy those who have paddled themselves up sh!t creek then set fire to the paddle all in the name of having the next number plate or foreign holiday nownowNOW, my heart goes out to those who got themselves into debt to pay for those luxuries such as, ermmm, food.

Just enough money and pride not to be dole queue dossers, but not enough to buffer themselves against what is to come. Poor sods.


pps. That loansdirect ad REALLY used to get on my nerves.

[99jolegg]

Of course the borrower is to blame - they asked for the loan in the first place. The bank didn't come around to their house and force them into a loan under duress.

However, my opinion is that the bank should be pointing out the dangers of the loan they are taking out - not assess whether someone is stupid and then tell them, or assess whether someone seems quite bright and don't tell them. If there is a risk, tell them about it and let them make their own decision! If they then go ahead with the loan, they go ahead with the full facts in posession.

Of course, it isn't in the banks' interests to point out the flaws of their plan (unless they think the plan is hideous to the point they won't get the return) which is probably why it doesn't happen like that.

Whether you think the analogy is ridiculous or not, I don't really understand why people disagree with a bank pointing out genuine flaws in their repayment plan before letting them sign! If they ignore this and continue to sign, good on them, and good luck with it. My point was that giving money to somebody that might not know better, is unethical. If you think they are stupid for not knowing better, then so be it, but it still doesn't make it right!

Anyway, I've said my piece!

[Wee Weasley Welshman]

I think I'll stick to my guns when I said that at least the borrowers have the defence of being a bit thick.

By definition half the public are below average intelligence.

Historically the finance industry has been controlled by law from exploiting people. The OFT the BoE the TSO the consumer standards people, the media have all acted to stop clever bankers from enslaving - I choose that phrase explicitly - the general populace.

That control was allowed to fail when it came to mortgages and credit cards in recent years.

That is now being corrected.


WWW



ps bankruptcy is a way of rewarding the feckless, it will become very popular next year and its going to be very lucrative for those that play the system.

[JohnRayner]

What did you think of the sailing mettyfor!?

I agree with you re: banks having obligations to point out risk. In fact I suspect this requirement is defined by law. The problem I think comes with how they tell you about it. Like on the telly when the voiceover guy tells you that "your home may be at risk if you don't keep up with repayments", but tells you so quickly at the end of the ad, that you literally have to tape it, then playback slowly to hear what he said!

Likewise, having tried to push my brain through the terms and conditions of loans I have had in the past (post-grad education, demonstrably reasonable IQ) I can easily see how the "bad bits" of an agreement get missed out in the reams of legalese.

So yes, I agree that banks could have been a bit, nay, a LOT more honest.

However, it doesn't take much for even a grossly uneducated person to arm themselves with a few precepts that might avert disaster.

"you don't get something for nothing" Six words. The credit crisis encapsulated?

And I didn't say your analogy was ridiculous. I don't know you, so it would never occur to me to insult you like that. I don't agree with it, but that's different.

Regards

JR

[Alex Whittingham]

I think WWW has it on the nail, but there is a sequitur. If the financial industry as a whole has failed to predict the outcome of their actions and also failed completely to spot the coming downturn how can their predictions be relied on now? One has to conclude that all those clever bankers with their economic theories can't predict squat.

[JohnRayner]

Interviews with those who worked in the system then left would seem to lend weight to this assertion, assuming those doing the telling aren't just bitter at being fired.

Of course, as previously posted, Peston would be the exception to this. :}

[Wee Weasley Welshman]

Not all are culpable nor played along. HSBC for example have sod all exposure to US sub prime, UK sub prime, the CDS or CDO market and haven't needed on penny of public bailout.

They were also the canaries in the coal mine when they declared the exposure that they did have to falling US house prices (through one bad acquisition).


Claims that the banks didn't know or understand what they were investing in is just spin with extra smoke and a side order of mirrors. They knew. They just concluded that if enough of them got in deep enough then the government would bail them out.

That worked.

Hank Paulsons plan almost worked too.

That was a close run thing. It will all be explained in a really good book in about 10 years times.

Just like with Enron - these guys were the smartest people in the room. Suggestions that they were ignorant and stupid are just the cleverest trick the devil ever pulled.


WWW

[spinnaker]

Alex Whittingham

An economist will always be able to tell us why something went wrong, but they never say what will go wrong. ;)

Whilst I can see the discussion turning to who is responsible, well for my money, we all are.

The banks for lending money they never had, and the rest us for going along with it.

Are the credit cards still doing 0%? I made over £5500 from that stupid game.

[Wee Weasley Welshman]

As an aside - a Collateralized Debt Obligaton is when I lend £10 to Alex who then lends £10 to Spinnaker. I then sell the right to collect my £10 debt from Alex to helimutt. As long as helimutt is paid £10 by Spinnaker then the whole system is fine.

A Credit Default Swap is when Grass Strip Basher bets £100 with 99jolegg that Alex won't pay me back my £10.


Multiply all that by a billion over 5 or so years, 30 currencies and 40 countries and you're still not close to the complexity of what will have to be undone. This isn't even the Ladybook level one of high finance and yet 98% of the population wouldn't have a clue about this sort of thing.

The world is not as you know it.


WWW

[ChrisLKKB]

Claims that the banks didn't know or understand what they were investing in is just spin with extra smoke and a side order of mirrors. They knew. They just concluded that if enough of them got in deep enough then the government would bail them out.

and why not, the voters demanded money and the Governments encouraged banks tio give it away, they won their last election on the back of the feel good factor they created. Now it's time to pay the piper as they say, unfortunately it's not just those who benefited from this wrecklesness who have to pay for it.

The world is not as you know it.Who knows it ? If anyone hasn't heard about CDSs or CDOs even if it isn't by name they'd have to have been living under a rock (or with the pprune wannabee zombie army).

I've heard positive views for a full recovery of the economy from those who are well aware of CDOs and CDSs and I have little doubt that the government are aware of them, fortunately we aren't reliant on the ineptitude of Clown and Darling to get us out of this mess. They have advisers who have advisers and with the stakes as high as they are they'll be too scared not to listen to them this time (I hope).

We're all going to have to swallow a bitter pill and it'll make us sick but there will be an upturn in a few years and we'll all feel better for it. I hated the times of easy credit and rocketing house prices, it made me uneasy and grumpy and if I knew what the concequences were going to be I could have made money out of it...hey ho, there's always next time ;)

[Wee Weasley Welshman]

Who knows it ? If anyone hasn't heard about CDSs or CDOs even if it isn't by name they'd have to have been living under a rock (or with the pprune wannabee zombie army).



Most people live under rocks then. Think how thick the average UK citizen actually it. Then consider that half the population is thicker than that.

Mentally these people are children. Letting them run loose with leveraged finance and credit cards was malicious, unprecedented and deliberate.

WWW

[chickentikkamasala]

Letting them run loose with leveraged finance and credit cards was malicious, unprecedented and deliberate.


I think the problems we have today should be apportioned thus:
Banks 30%
General public 20%
This Government 50%

Lets face it everyone has been greedy here.

You have to say that the banks have only done what they have always done and that is to try make money come rain or shine.
That's their business they are inherently greedy. They offered us debt knowing full well that years down the line that the taxpayer would foot the bill, well that time has come.

Unfortunately as mentioned by www aound 50% of the general public are thick. When majority of them couldn't even tell you who the current chancellor is then we can only rely on them to be interested in the X factor, Face Book and adverts for companies offering IVA's and consolidation loans.
The other 50% should know better.

The government can take the majority of the blame for the current situation, for failing to regulate the banks, letting the utility companies shaft us and introducing the IVA into the equation.

You see the story goes like this:

Bank wants to find new ways of making money so bank offers loans to lowest common denominator knowing full well that they can't repay. They repackage the debt and pass it on knowing that when the music stops the tax payer is the person without the chair.
Government knows this and does nothing to stop this going on knowing that it's extra tax receipts in the coffers when lowest common denominator spends the loan.
To the government people taking out loans is just another form of tax.
Goverment further ecourages this by bringing in the IVA. This encourages thick joe public to take on debt without taking on responibility for it hence there is nothing to deter them for getting in over their heads.

Ultimately we and the government have been shafted by the banks but you have to say that the majority of the blame lies with the government for failing to govern.

After 11 years in charge can you see one positive thing this government has done for us.

Nope neither can I.

[v6g]

I think the problems we have today should be apportioned thus:
Banks 30%
General public 20%
This Government 50%

Or maybe that should be more like:
Banks 29.9%
General public 19.9%
This Government 59.9%

[ChrisLKKB]

Switch the general public and banks round to 30/20 respectively and i'd agree with that.

It is the responisbility of the banks to tell the borrower what their repayments will be, how they will change during the term of the loan and what the consequences will be if they don't keep up repayments and financial advisers do this (or in the case of a credit card application it's written in on the form).

Banks can't be expected to know every last detail of a persons finances now or in the future, they have to rely on application forms being filled in honsestly and that the applicant has read and understood everything on the application form (including the small print) when they sign on the dotted line, and lets be honest, lots of people will stretch the truth when it comes to filling out loan applications to get that car, house or the holiday they want.

Where banks went wrong was 3.5X+ 100% and even 125% mortgages but they were only doing their job in competing with the rest of the high street, keeping their share holders happy and keeping the government happy. Regulation or lack of it failed there.

Most people live under rocks then. Think how thick the average UK citizen actually it. Then consider that half the population is thicker than that.

I should have written If anyone hasn't heard about CDSs or CDOs by now even if it isn't by name they'd have to have been living under a rock. I hadn't heard of them until a few months ago but they should have had significant coverage on the media by now for all but the most reclusive of recluses not to have heard of them. (well maybe not Sun readers).

[Grass strip basher]

"HSBC for example have sod all exposure to US sub prime"... errrrr hello WWW.... what about their acquisition of Household in the US 3-4 years ago... that is one of the biggest sub-prime lenders in the world! c$100bn of loans big enough for you??
:}

[Wee Weasley Welshman]

Yes, as I said, apart from one unfortunate purchase (which was Household) they when led the way by writing off those debts way before it became fashionable. They made one mistake by acquisition, realised it, took the hit and overall have got their act together very well. They will certainly emerge from this period as a stronger global player than many of their peers.

I'd rate HSBC very highly out of the global banks.

We are now going to see the whirlwind unleashed on the big insurers. I doubt all of them will survive. Time to make sure those pension funds are in safe hands..

The is the end of the beginning. Nothing more.


WWW

[helimutt]

So say I had £10k to invest in shares. Where would be the best place to buy? Maybe I can make something out of this misery?

ps WWW, did you say you were giving me £10?

[spinnaker]

# www "A Credit Default Swap is when Grass Strip Basher bets £100 with 99jolegg that Alex won't pay me back my £10."

What if I take a bet (CDS) with ChrisLKKB for £1000 that 99jolegg will loose on his CDS. And then I default on my payment of £10 to helimutt. I win £1000.

[Adios]

Helimutt,

It depends on how long you plan to invest it. In a recent NYT Op-Ed, Warren Buffet writes that equity stocks are the surest bet. There are some real bargains with sub-15 P/E ratios right now. One thing for sure, cash in an interest bearing account is not going to keep up with inflation and putting it in bonds will lose against inflation by several percent, though both are reasonable places to avoid the short term volatility. Too bad a share of Berkshire Hathaway costs a lot more than your £10K.

[Re-Heat]

What if I take a bet (CDS) with ChrisLKKB for £1000 that 99jolegg will loose on his CDS. And then I default on my payment of £10 to helimutt. I win £1000.
Then you would be insider trading, which is of course illegal.

There are some real bargains with sub-15 P/E ratios right now.
Tricky - many companies have not yet reported this year, and the effect of a full year of minimal credit will have a worrying effect on the earnings side of the equation. Expect PE ratios to fall naturally before they climb.

So say I had £10k to invest in shares. Where would be the best place to buy? Maybe I can make something out of this misery?
We cannot give you investment advice here. If you are brave, some shares have been hit by irrational sentiment, while others have more defensive or counter-cyclical properties (think defence, tobacco, security etc). In the absence of Warren Buffet, you will have to identify those yourself.

[Re-Heat]

For those who are interested (as this thread seems to have evolved that way) what has happened is as follows:

Loan providers pool the loans, which are then structured into various assets that can be sold on in various tranches. In growing so rapidly, the first stage (pooling the loans) fell apart as proper assessment of the borrowed failed, resulting in the technical analysis to pool the assets falling apart, and losses exceeding those modelled and expected based upon historical losses.

This was compounded by portfolios of assets being further pooled post-securitisation into sub-pools, which were further pooled and securitised, and holdings highly-leveraged based upon the high degree of analysis involved in their construction. A true situation of being precisely wrong, instead of approximately right in their analysis.

Positions in these highly-leveraged structured investment vehicles were hedged through credit default swaps bought from "monolines" (portfolio insurance against default) - the problem being that such a vast quantity of these assets existed that the insurers could not possibly cover the losses involved.

Increased repossesions, falling prices, and huge growth in the industry collided to produce a massive crunch. Nobody knows what exposures sit where, or who the suckers were who bought the assets (AIG were one).

[spinnaker]

Re-Heat "Then you would be insider trading, which is of course illegal."

Credit Default Swaps are un-regulated!! I would agree there is a case of fraud, possibly.

[ChrisLKKB]

For those who are interested (as this thread seems to have evolved that way) what has happened is as follows:......

Always interested in free information :cool:

Regarding shares, if you subscribe the the adage, be fearful when everyone is greedy, be greedy when everyone is fearful, now is the time to buy.

Out of interest, Anthony Bolton (Britans Warren Buffet) has bought HSBC and RBS. Not sure about RBS given what is happening to them but at they could be a winner in the long run once this mess is all sorted out. HSBC has been recommended by others though, it's a shame they aren't trading at under a quid a share.

On the other hand, advice from an certain inventment manager with even more experience that Anthony Bolton is 'now is not the time to try and be clever'. I think Bolton is the wealthier of the two though.

[ChrisLKKB]

This tickled me...


The Actions of the Amateur Investor. TINYLINK.com (http://tinylink.com/?eHmBc5ECME)

[ChrisLKKB]

Good news so far, Lehmans CDS turn out to be overstated and WaMu's may go the same way

UPDATE 1-Fears about Lehman CDS deadline overstated | Markets | Markets News | Reuters (http://www.reuters.com/article/marketsNews/idUSN2130122520081021)

alternative story

Lehman's massive credit default swaps settle smoothly - MarketWatch (http://www.marketwatch.com/news/story/lehmans-massive-credit-default-swaps/story.aspx?guid=%7B70FEEA73-AAF6-4555-A10E-EE434BFC983E%7D&dist=msr_11)

however (before WWW beats his keyboard up)

Still, there are more companies at risk of default and more debt outstanding than in several years, and credit-default swaps may cause continued headaches for credit markets, said John Atkins, a fixed-income analyst at IDEAGlobal.
Going forward "workouts can be much more convoluted," he said. "This doesn't mean things can't go wrong."

[student88]

Hi all,

I don't know if this is common knowledge yet however it seems Monarch are the next airline to reduce pilot numbers, following easyJet's foot steps in letting their newest pilots leave the company. Around 20 guys and girls who came from CTC are being released from the LGW base.

S88

(source: colleague who works in MON Flight Ops.)

[G-SPOTs Lost]

The wannabee potential "bolthole" that was GA/Corporate has just had another 25 pilots released with the unfortunate demise of EBJ

[heli_port]

House sales plunge 53% to three-year low (http://business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article4984475.ece)

http://www.mysmiley.net/imgs/smile/evilgrin/evilgrin0039.gif (http://www.mysmiley.net/freesmiley.php?smiley=evilgrin/evilgrin0039.gif)

[MIKECR]

Great stuff heli-port...hardly breathtaking news considering theyre speaking about the last 3 year period...:rolleyes:

[littco]

"Only 59,000 residential properties worth more than £40,000"

Can you buy a residential property for less than £40,000:eek:

[Aerospace101]

From the BBC:

Airline traffic has fallen because of economic slowdown for the first time in 25 years, according to figures from the Association of European Airlines.

Overall traffic fell 1.1% in September, compared with the same month last year, while domestic traffic fell 12.4%.

Since the early 1980s, only the 11 September 2001 attacks, Sars and the Gulf Wars have caused such declines.

With European countries entering recession, traffic cannot be expected to recover quickly, the AEA said.

The association blamed the "toxic" combination of economic slowdown, declining business and consumer confidence, and fuel-driven price inflation for the fall.

Ulrich Schulte-Strathaus, general secretary of the AEA, said: "In terms of response to purely economic stimuli, these figures are the weakest our industry has seen for 25 years."

Cross-border European flights fell 1.1%, while total international flights were down 0.1%.

Alitalia, Italy's national airline that filed for bankruptcy protection in August, saw traffic fall 25%, more than any other carrier.

Spanair was down 21.1% and Icelandair was down 12.8%.

[heli_port]

Growing panic over an imminent global recession sent Asian stocks plummeting today and pushed the price of oil down to a 16-month low amid signs that demand for crude is falling.

Oil dives and Asia tumbles on recession fears - Times Online (http://business.timesonline.co.uk/tol/business/markets/article4997993.ece)

http://www.mysmiley.net/imgs/smile/love/love0076.gif (http://www.mysmiley.net/freesmiley.php?smiley=love/love0076.gif)

[spinnaker]

BBC NEWS | UK | Ryanair to close base in Valencia (http://news.bbc.co.uk/1/hi/uk/7688509.stm)

The real truth is, Ryanair need to reduce capacity.

FTSE standing at 3786 -7.3% down. Any bets for 3500 soon?

[Wee Weasley Welshman]

Rumours circlating that GM might file and that the Fed will close the Stock Market just beforehand. iTraxx above 1000. Hedge fund collapses imminent.

Bunker door closing....


WWW :(

[no sponsor]

I like the spin in that Ryanair statement, they had invested 85 million (the cost of two aircraft)!

It looks like the council achieved what they set out to do - support a Spanish airline. Hardly a surprise.

[heli_port]

Panic returned to world financial markets today and share prices tumbled as big investors cashed in before a global economic downturn. Confirmation that Britain is in the first stages of recession only added to the sense of fear.
Wall Street plunged at the opening bell, the Dow Jones Industrial Average falling 398 points, or 4.6 per cent, to 8,293 in the first five minutes and the Standard & Poor’s 500 falling by a similar amount as investors ploughed into Treasury bonds.


Market meltdown returns as investors lose confidence - Times Online (http://www.timesonline.co.uk/tol/news/uk/article5008230.ece)

http://www.mysmiley.net/imgs/smile/fighting/fighting0079.gif (http://www.mysmiley.net/freesmiley.php?smiley=fighting/fighting0079.gif)

[Slick]

Valencia BASE. RYR

Shutting down VLC is a purely commercial decision, based on exactly what who knows.

Ryanair have anounced four Italian bases in the last month, two of those on Wensday afternoon. More new bases will be anounced in Spring, and there will be airports in Spain that will be happy to takeover where VLC left off.

I think things are quite bad enough as they are. It would probably be more constructive if you post fact, or well supported evidence.

I work for Ryanair and I hope the above helps.

Best Rgds

[kala87]

Oh well, looks like no more flying for me for a while..

My usual mount is a shared C182, and the money to pay for the flying comes from profits (if any) made on investments. It's hard to justify the cost of private flying when the capital value of my investments has plummeted by around 40%.

At least, a very kind FTO where I did my IR offered me a relatively cheap rate to fly their FNPT-2 sim, so hopefully my expensively acquired ME/IR skills won't entirely fade away.

Anyone else in the same situation? Not looking for any sympathy, I should have seen this coming.

[lc_aerobatics]

Well, at least one airline is doing well http://www.norwegian.no/graphics/Investorrelations/Financialreports/Interimreports/2008/Q3_08_Presentation.pdf

[JB007]

R&N; Openskies and L'Avion - Moving to a French AOC! (http://www.pprune.org/rumours-news/348630-openskies-goes-french-aoc.html)

[Re-Heat]

Well, at least one airline is doing well http://www.norwegian.no/graphics/Inv...esentation.pdf
Yes, but it is bleeding cash - look at page 4 - the only reason for a small cash decrease is the huge gain on financing (probably USD/NOK related for purchases) - there is a NOK 312m loss on operations!

They have had a huge capital injection, and furthermore, they don't disclose any margins at all - seems to me as though they are "buying" market share at poor margins.

[spinnaker]

seems to me as though they are "buying" market share at poor margins.

Its one of two options. Grab market share on the back of cash reserve and or outside finance, when a couple of competitors withdraw from the routes, or go bust, increase the margin. If the timing is right, they could come out the other end a bigger outfit with less competition and betters margins to pay of the loans.

Option two, is maintain margin and tough it out, being prepared to contract the size of the company as predators capture market share. Trouble is, as load factors drop, so does the profit while you sit and hope the competition have overcooked it and run out of money.

If I was an airline CEO (thank god I'm not), I'd be spending a lot of time hanging around my competitors dustbins, keeping an eye out for the waste paper and discarded computer disks.

[heli_port]

Article (http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5029768.ece)

:sad:

[ChrisLKKB]

Not exactly unexpected.

I notice the Times lists an astrologer as one of their top10 people who predicted this melt down
Money Central - Times Online - WBLG: Ten people who predicted the financial meltdown (http://timesbusiness.typepad.com/money_weblog/2008/10/10-people-who-p.html) everyone except the government it would seem :E

[smith]

Hey guys why waste time reading this thread when we can pick up newspaper or switch on the news, will save us time clicking on all the links in the thread.

[ChrisLKKB]

Yeah, don't bother.

[spinnaker]

Hey guys why waste time reading this thread when we can pick up newspaper or switch on the news, will save us time clicking on all the links in the thread.

Funny you should mention all that mouse clicking. www.dontclick.it (http://www.dontclick.it) has been doing research for a no click web. I have my own web site for my farm and B+B and working on a 'No Click' version for my own purposes. Be interested to see how you cope with no clicks. :ok:

[eikido]

Sterling is out of business. :{

Eikido

[JB007]

BMI and Lufthansa, Sir Micheal selling up! For UK pilots, career choices are running low... (http://www.pprune.org/rumours-news/348898-bmi-lufthansa-deal-looks-done.html#post4490916)

[Aerospace101]

Yep, more jobs going.

Only this year sterling were pioneering the MPL, who would have thought theyd go bust.

How many jobs will go at bmi, regional and baby?? I feel an invasion by de germans coming!!

[heli_port]

UK airline BMI is being taken over by Germany's Lufthansa.
Lufthansa, which already owns a 30% stake in BMI minus one share, is buying the 50% of the company owned by BMI chairman Sir Michael Bishop.


BBC NEWS | Business | BMI being taken over by Lufthansa (http://news.bbc.co.uk/1/hi/business/7697261.stm)

http://www.mysmiley.net/imgs/smile/fighting/fighting0079.gif (http://www.mysmiley.net/freesmiley.php?smiley=fighting/fighting0079.gif)

[BelArgUSA]

Please stop all that...!
Many airlines are going bust, yes... Sterling joining the list today.
And the world economy is getting worse as days go by...
xxx
But... support your pilot training schools and academies, and TRTOs.
Even if few openings for the next 3 or 5 years, how will they do with no trainees...?
It is up to you all to continue dreaming of a future (that is highly questionable).
Of 100 dreamers... maybe 5 will get to sit in the flight deck of an airliner.
And what type of wages will that be in most cases...?
But I know, fATPL math studies do not include statistics.
Good luck to all.
:*
Happy contrails

[JB007]

Times Online - Virgin wants in on the Lufthansa deal with BMI to create Super-Carrier (http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article5037731.ece)

Things potentially changing fast, I stand by an earlier post of mine, when the dust settles, choices will be limited...even for experienced guys...

[BelArgUSA]

The way things go... I can foresee what airlines will be in - say 20 years...
At least for North America, South America, Europe, maybe even Asia.
xxx
Europe, will have one airline, call it Air Europe. Blue tail, gold stars...
It will be a consortium of BA. LH, AF, KL and IB...?
A few hubs, the leading capitals. High speed train service to nearest cities.
Nationalism helping, all Airbus fleet.
xxx
North America will end-up with final merge of two majors, AA and UA.
Absorbing AC, DL, SW and MX.
What name...? North American Airlines, maybe, or United American Airlines.
Same story for the hubs, the large cities will have one.
Fleet, there, likely to be all Boeing...
xxx
South America might get a Mercosur airline, controlled from Brazil.
Embraer airplanes... they might even design long range large planes.
Mercosur with Argentina, Bolivia, Chile, Paraguay and Uruguay.
xxx
Another in Central/South America with the "Bolivar" nations...?
Colombia, Ecuador, Venezuela, Peru, and the CenAmerica nations.
Mexico could join, or might decide to go with North American...
xxx
Asia... probably two or three airlines...?
One definitely for China+Taiwan. Another one for India.
And one for the East Asian nations, controlled by Singapore.
Incorporating SE Asia, Indonesia, Philippines, Malaysia...?
Japan might stay by itself, or finally shaking hands with Korea...
xxx
Pilots...?
Certainly less pilots will be needed than for separate airlines.
Since each airline will have a single pool of pilots.
This for line operations, training and reserve crews.
Will pilots be with an airline for entire career...? Maybe yes, maybe no...
There might be yearly contracts only... depending on economics and traffic.
xxx
Seniority...?
There might be a list for captains, a list for first officers
Salaries based on years or experience, not by type (or size) of airplane.
So no need to get on "bigger A-380" to get top salary.
Result will be highly qualified pilots with 10,000+ hrs on given type.
Less training costs for numerous transitions and upgrade.
Hopefully, no more type rating required to be considered for hire.
Training bond maybe...? Obligation to remain (x years...?) with airline.
Prerequisite, maybe CPL, IR, ME and written ATPL to be hired initially.
xxx
Ooops, I forgot to mention... one worldwide Air Cargo (merged FedEx/UPS).
:confused:
Happy contrails

P.S.
Do not know about Africa...
For Australia or NZ, they probably will be together as one.
Middle East - who knows, but all will be controlled from the UAE.

[Wee Weasley Welshman]

Sterling are bust.

Their pilots are now joining the hundreds of other highly experienced pilots in Europe who can't get a flying job anywhere at any price.

There Are No Jobs. So far only tiddly little airlines like Sterling and XL have gone bust little to anyones suprise in the industry. I tell you now that at some point in the coming crisis several large airlines will shockingly go bust.

It will happen. It always does.

Whatever you were planning don't go flying until this storm has passed - the windsocks about to come off..



WWW

[JB007]

Europe, will have one airline, call it Air Europe.

Harry Goodman will be having a right old laugh at that one...!!!!

[JB007]

And Friday not only marks the release of A Quantum of Solace...but traditionally the end of Summer flying programmes! Winter is usually when it all goes Pete Tong

See you in Leicester Square!

[ChrisLKKB]

So far only tiddly little airlines like Sterling and XL have gone bust little to anyones suprise in the industry. I tell you now that at some point in the coming crisis several large airlines will shockingly go bust.

Can you specify which ones ? I was thinking about booking a holiday.

[Wee Weasley Welshman]

Nope, sorry. Could be ANY airline. Any.

We haven't even seen the proper job losses yet. The problem with 2009 is that about a quarter of the passengers aren't going to turn up. That is the somewhat intractable problem to which airlines don't really have a solution due the crippling high fixed costs and the razor thin margins. Its a feature of the industry.

The market provides the solution by wiping out big chunks of the competition by means of bankruptcy.

Unfortunately Wannabes are then totally, utterly, remorselessly left out in the cold until many of them starve to death or are eaten by their loans.

If you want to see where we are in the cycle look at the following data on BA's profits since 1996. Note how low the lows are compared to the highs. Note the most recent figures record setting high. Guess what happens next. This is a reasonable proxy for the whole industry.


British Airways - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/British_Airways#Financial_performance)


Don't try and beat the cycle.


WWW

[smith]

Don't try and beat the cycle

Don't try and beat the cylinder!

[ChrisLKKB]

except this wont be a perfect cycle will it, the next trough will be deeper than in 96. IMO cycles are a bit like a VSI, great for determining a trend but they only tell you the details once they've happened.

[MarcoFF]

Huh, looks like Sterling does it every 15 years or something. Just thinking what could be the next name.. Maerskling?
Norwegian will take over lot of Sterling routes, including domestic. So a guess many Sterling pilot will go there. I am just curios, what will happen to the jobless MPL pilots? Well, most of them were already unemployd even before the bust. What a farce the whole MPL thing.

[heli_port]

except this wont be a perfect cycle will it, the next trough will be deeper than in 96.100% agree with that :8

Low sales drive house prices down

UK house prices continued falling in October and are now nearly 15% lower than a year ago, says the Nationwide.BBC NEWS | Business | Low sales drive house prices down (http://news.bbc.co.uk/1/hi/business/7698393.stm)

http://www.mysmiley.net/imgs/smile/indifferent/indifferent0028.gif (http://www.mysmiley.net/freesmiley.php?smiley=indifferent/indifferent0028.gif)

[JohnRayner]

I'm looking at the house-price graph since the 70's and trying to eyeball when prices might stop going down and then start to rise again, based on the expanding peaks and troughs of previous decades.

:(:(:(

[spinnaker]

JohnRayner "I'm looking at the house-price graph since the 70's and trying to eyeball when prices might stop going down and then start to rise again, based on the expanding peaks and troughs of previous decades."

I presume you want to buy, rather than an academic or speculative exercise. Historical data might not give the accuracy to predict the actual bottom this time around. However, real time data might be good enough as I feel there will be a significant period of prices bumping along the bottom and should be identifiable. Most observers seem to go along with a price drop from the peak of 35% to reach the bottom.

One of the pieces of data missing from the negative equity calculations is the 'Rent Back' deals that an increasing number of home-owners have entered into.

[spinnaker]

IMO cycles are a bit like a VSI, great for determining a trend but they only tell you the details once they've happened.

If some smart ass didn't pull the circuit breaker on the GPWS (Global Profit Warning System) then someone would have heard "whoop whoop, pull up"

[NickGooseBrady]

From the "horses mouth" : Easyjet have laid off a batch of CTC Wings Cadets.

These guys and girls finished their CTC wings course a while ago and were taken on by EJ on the standard 6 month contract that they offer to CTC Wings graduates. Well that 6 months is up and EJ have said thanks but no thanks until at least April next year, and possibly never. Nice timing as they have just started to pay back their 75k HSBC loans. Ouch.

Another mate, with BA since finishing CTC, is now just flying on average 5 days per month! His sector pay was paying back the loan. Not now.

These are hard times and they are going to get much worse. If you can, delay as much as humanly possible.

:)

[UAV689]

was shocked today...i work 7 days a week, mon-fri in office and weekends in a warehouse to pay for the ATPL, i have been sent on a forkflift course this week.

Day one instuctor turns up in BMW M5. Day 2 he turns up in Porsche GT3. little investigating online and forklift instructors charge £300 per day!! (both days we have worked 8-2, day 1 we watched an hour of videos and spent 2hours talking about holidays, hardly work for him!!)

Only costs £1500 quid to be an instructor, think that is my new plan b!!!

[Wee Weasley Welshman]

Nearly all wannabes will be on the dole for years.

Those are the facts.

Despair.


WWW

[rogerg]

Your a happy little soul.

[ChrisLKKB]

http://www.cartoonstock.com/newscartoons/cartoonists/gmi/lowres/gmin85l.jpg

mind you, things are pretty s:mad:hit!

[tupues]

Another mate, with BA since finishing CTC, is now just flying on average 5 days per month!

Yet is still earning his £28000 basic salary. My heart bleeds.

[Wee Weasley Welshman]

15% above average wage doesn't go far when you have £80,000 of unsecured debt to service and repay. Especially if you have to live anywhere within choking distance of Londinium.

Things are unremittingly, totally, crap for Wannabes. A glum face and a rain cloud would be entirely appropriate. Were I a Wannabe instead of having >10k hrs..

Who is telling Wannabes that they are wasting their time, money and dreams for the next few years? Is it the magazines? Is it the schools? Is it the employers? Is it the government? Is it other Wannabes? Is it the pilot community? Is it BALPA? No. Its just me and a few others on PPRuNe.

WWW

[NickGooseBrady]

Another mate, with BA since finishing CTC, is now just flying on average 5 days per month! Yet is still earning his £28000 basic salary. My heart bleeds.

Exactly! Time for a reality check by every wannabe. He is actually earning 31k basic. This is just about as good as it gets for a new guy. YET, he has to pay in excess of 600 ppm rent to live near LHR and his HSBC loan is 1200 ppm for the next 7 years.

Would you really want to have the same debt and very similiar rent if you landed a job with FlyBe post CTC? 23K per year and the same circumstances would make life very difficult.

For God's sake. Do it, do the training, but stay DEBT FREE during the process and don't expect to get employed until 2011 at the earliest. Modular never looked so good.

Cheers, NGB :)

[chickentikkamasala]

Nearly all wannabes will be on the dole for years.

Those are the facts.

Despair.


WWW


www I am not sure these comments are very helpful. First of all the people who have just finished their training know that they may have now done their money with limited prespects but I can't help but think there is a touch of gloating in the manner of your posts.
These people are feeling pretty sick at the moment remember how excited you were when you embarked on your training and the thought of becoming a pilot. I know that these people feel sick enough as it is about the dim prospects and the thought of shattered dreams without having their noses rubbed in it.

Maybe you are aiming your comments at the stupid wreckless people that are going to embark on training regardless of you warnings, but surely there are very few of these now and they are fully informed as to the risks. For those who have the money to blow regardless then good luck to them, they know what the deal is now.

To be quite frank I expect more from a moderator.:confused:

[Teeks]

WWW's manner is directly proportional to the state of affairs for wannabes. At first he sugar coated most opinions, but he's been saying it for so long with people still arguing his opinions he just says it as it is, which can be painfully blunt if you're one of the people he's talking about!

I'm going to wait a while before embarking on my training. I'm still doing a PPL as soon as I can, and then waiting the long wait.

[Wee Weasley Welshman]

the flying schools are as busy as they ever were...

I'm not gloating. I'm scared.

WWW

[Frankly Mr Shankly]

ChickenTikka, I dont think WWW is doing anything wrong in his warnings to wannabees, not that he needs anyone to defend him Im sure he's big and ugly enough to do that himself (no offence :\).

However you just have to read some posts in this thread and others to see that the message just aint getting through to some, this "dream" seems to knock out some of their common sense! I replied to one the other day who was talking about "yeah, there maybe some job losses in the industry now, but in about 12 to 18 months, they should all be over and things on the up etc etc etc ...."

Bloody hell, what does it take to get through to people like this. Even if things are "on the up" (which is highly highly unlikely), he seemed to assume, okeydokey then, job losses over, thus me with my 200 hrs must be in with a shout.........that just isn't reality, and he's not the only one.

So if anyone's words on here can make these people at least stop, pause, and THINK, then surely it's appropriate. And the message obviously hasn't got through so far to some, so it may need spelling out in harsh, blatant terms.

[mad_jock]

Your never going to get through to a majority of the dreamers.

It's up to them if they don't want to listen to WWW.

Its not our cash in fact its not thier's either most of the time. Let them spend it.

There will always be the few examples of people getting lucky, although to be honest I don't think luck has much to do with it. Its all hard work and determination.

There has always been wash out rates at all stages of the process to getting to fly the line. When times are good a higher proportion of those that first sit in a light aircraft for the porpose of earning a living, when times are bad a lower amount will get there.

I did ask at the CAA why they didn't produce statistics on.

1. Number of intial class 1 medicals issued.
2. Number of initial sittings of ATPL's
3. Number of intial CPL's issued
4. Number of Intial IR's
5. Number of first type ratings issued.

It is classed as highly commercially sensitive information. By not only the training industry but also the CAA and Airlines.

Why because the whole system works by having a glut of supply of new pilots. Airlines need to be able to grab folk off the street. The training system needs a constant through put or it can't keep up with the fluctuations in demand from the airlines. And the CAA needs people in the system or it starts costing them serious amounts of money keeping the system in place and also gives them issues with again the lag time getting things ramped up when demand requires it.

Wannabies are pawns in a very large and expensive industry which is very heavy in capital investment from the very outset of training the small proportion of the staff which is mission critical to its survival. Millions are pumped into the training industry which never earn a penny for the people spending the money.

Its not in anyones interests apart from the pilots themselves for the real state of play in respects to jobs to be fully known. In fact it would kill any chance of airlines being able to react to customer demands.

Its going to be pretty horrible for the next few years. WWW in my opinion is right just now but I suspect it could get a whole lot worse. God forbid Flybe, easyjet or any of the large fleet operators go tits up. It could go quite rapidly from a pain in the bum for the majority to a complete collapse in the pilot market which will take 5 years plus to sort out.

So if you think about it the dreamers are actually helping out the people who take the advice from WWW they are supporting the system so when it does become an acceptable risk to train all the services are still available. The skill is going to be when to commit to training.

[PosClimb]

The flight training industry is a big business.

There is a long line of people ranging from instructors, to the secretaries and admin staff at the flying schools, to the government workers, medical examiners, you name it, who are totally dependent on there being a constant supply of young dreamers with stars in their eyes.

I'ts a big business, and every wannabe who steps into the "sales office" (pardon, it's technically called the 'Admissions Office'" should be aware of this fact.

[Migas]

PosClimb, :ugh:

ok, all the Universities are a 'big business', all Music schools are a 'big business', even all Football schools are 'a big business', etc etc etc...That's life. What's your point? :ok:

[PosClimb]

ok, all the Universities are a 'big business', all Music schools are a 'big business', even all Football schools are 'a big business', etc etc etc...That's life. What's your point?]

That's very true, and if you're old and wise you'll know that, hopefully.

Some naive younglings, however, might think that because the flying school is a "school" quote unquote that they're going to get impartial advice. After all, "schools" are about unbiased truth, aren't they? Or that the industry will give them 'impartial' advice.

As mentioned, there's a long line of people from from the secretaries to gov't workers whose jobs are dependent on there being wannabees with stars in their eyes.

[ChrisLKKB]

Uni Students get all worked up because they finish their course with a £30 (ish) K debt yet wannabee pilots seem cool about a 100K debt.

The stakes are much higher for both the aviation student and school with multiple mortgages on aircraft, sims and premises rental costs. I dunno about giving potential students impartial advise, it would appear some of the larger schools are feeding these potentially nieve and vulnerable youngsters down right BS!

I suspect the wiser wannabees will have read parts of this thread then picked up a news paper (or watched BBC news) and changed their plans appropriately saving themselves a lot of money and heart ache. That's justification for this thread alone.

[bellx1]

I'm a wannabe who has been following this thread with great interest since it started and yes my plans have changed considerably in response to the current turmoil. I was initially planning to go the integrated route courtesy of my friendly neighbourhood bank manager but now plan to save as much as I can and go the modular route, paying as I go along, (funny how this time last year a 70k+ loan seemed like a sound investment but now seems more like insanity). Hopefully in 4-5 yrs when i'm the proud owner of a faptl things will start to look up in terms of recruitment. so thankyou to WWW, Heli-port,ChrisLKKB, spinnaker and everyone else who was shared their experience/advice and helped me make (hopefully) the right choices.:ok:

[Migas]

Got your point.

Uni Students finish the school, 30 k debt, get a job or not.
Aviation Student finish the school, 100 k debt, get a job or not.
Hold it right there. The risk is much higher for Aviation students. Thus the market offers higher wages to pilots on average.

The aviation industry is one of the least probitable industries in the market. It's kind of a 'cool' industry:cool:. Nature of rivalry is intense and exclusive on price. Very hard to differentiate. Constant flow of new airlines into the game. You can simply lease a plane. All generic technology. You can simply start connection between two cities. Customer is very price-sensitive. Suppliers of aircraft and engines, and airport gates have a lot of bargaining power. They get most of the profit. There are always some substitutes like getting into the train, driving your car, shipping your goods by sea. Finally unionised labour (pilots in particular) can literally shut you down. I admire aviation industry managers.

But we love to fly.

WWW: do you agree?

[heli_port]

Oil prices rose almost 3% on Friday - but falling demand pushed crude to its biggest monthly drop in October.

BBC NEWS | Business | Oil prices up after record falls (http://news.bbc.co.uk/1/hi/business/7703376.stm)

;)

[NickGooseBrady]

Thus the market offers higher wages to pilots on average.


Your joking, right? It is a hell of a lot easier to pay back 30k worth of debt with a good graduate job then it is to pay back 80K (sometimes more) worth of debt as a very poorly paid First Officer.

The outlook doesn't compare favourably for pilots until at least Captaincy and possibly not even then. Example - my girlfriend, 30 years old, a graduate and a consultant with a well known international consultancy firm earning 75k per year (and she's blonde). Her job considerably safer then many pilots jobs at the moment. The big big money isn't until Long Haul Captain or Training Captain.

The fact of the matter is that Pilots are not amongst the highest earners and particularly when compared to the investment they have made. There will always be that steady supply of pilots who have placed aviation on a pedastal and are prepared to pay through the nose to follow their dreams. FTOs simply play on and manipulate this passion to assure their existence and keep the wheels of the "system" turning.

It takes the likes of WWW et al to keep wannabees in touch with reality.

NGB :)

[BitMoreRightRudder]

Your joking, right? It is a hell of a lot easier to pay back 30k worth of debt with a good graduate job then it is to pay back 80K (sometimes more) worth of debt as a very poorly paid First Officer.


I take your point but it depends on your definition of poorly paid. Not every airline pays peanuts - I certainly don't consider myself poorly paid. It obviously depends on type and experience but within 18 months of starting as an F/O I was on more than my parents ever earned combined and I comfortably out-earn friends from home/uni who went into other careers, so an F/O wage, certainly if flying jets early in a career, compares favourably to the majority of graduate jobs.

It is very possible to service repayments of circa £1000 a month if you can quickly get into the RHS of a jet, unfreeze the ATPL (with associated payrise) and not have many other commitments.

If you have a mortgage and kids and/or can't get the first break on the other hand, life is more interesting.

[Ylva]

I completed my MCC 5 months ago and took up a job as a driver for a big International organision,Driving the the top brass,i earn an equivalent of 3000 pounds per month take home first class health insuarance valid worlwide and very good pension plan,i only have to pick the boss from home take him to work,chill out half the day .reading newspapers,take him for the odd meeting then back at home at five.

Now i have spent thousands to get my flight training done,the first job that i can land here, the average salary would be an equivalent 2200 pounds i will have forked out tens of thousands to get typed no medical no pension plan and work like a dog,

Why do i do this? i want to achieve a life long dream,will i do this until i retire? no ways.

[ChrisLKKB]

There is no monetary benefit in being a first officer these days, especially if you have to service a loan.

Even in this current climate a friend of mine is grossing in excess of 50K as a contract electician, and his job is a lot safer than most pilots out there as he works on projects for well capitalised companies. (And positions like these wont cost you 100K or even 30K, more like a few hundred and a couple of years day release while earning good money during the day as an electricians mate.)

There are plenty of well paid jobs out there for graduates if you choose your career path with your head and not your heart.

I suspect the reason that first officer positions are reasonably paid is more down to a pay structure driven by the unions either directly or indirectly (in order to compete with other companies) than any benevolence towards wannabees who've burried themselves with debt.

[Migas]

NGB,

I am not joking. I take your point, but you missed mine - 'on average'. I also did not specify between Captains, FO's or Training Captains. Or even between long-haul or short-haul. I do admit that this is just a poor guess based on the airline industry in my country.

(she is blonde:):)) ok all of us have our own aspirations and (thank god) we are free to choose our future. If your assumption regarding the highest earners was correct then we would all take the job of your girlfriend and become consultants or the like. I do not wish to change the color of my hair of course by the way.

Food for thought, we can become airline pilots 1 1/2 years. To become an engineer we need to study at least 3 years, this of course without a MSc.

Yvla,
Sorry to say but your drviver job sounds a bit boring to me. I am sure it is great to you. I do understand why you want to achieve a life long dream. That is partly what life is all about.

I also do not think we need WWW to keep touch with reality; we could instead just put a message every time we log in on Pprune advising:

'Do not start training now and until the economy recovers from the present recession and dont tell us we have warn you signed; we will advise you when the economy is healthy again. signed ...' :)

We certainly need to ear the ideas of everyone (and WWW's 'moderation' in the first place.):ok:

[Lost man standing]

It is meaningless to compare pilots' pay with high-earning jobs unless that is what you would otherwise be likely to be doing. I know a couple of ex-electricians who are now flying because the work was so tedious, and I for one would not want to be a consultant, and few people get the opportunity.

Most people who leave university start on well under £20k. A lot work in bars, shops or menial office jobs in which their degrees are meaningless for months or even years. With 30k of debt and no obvious advancement that is a rather more difficult prospect than surviving on even a turboprop FO's salary, usually significantly more than £20k starting, knowing that experience does count and the pay will rise. I have not checked lately, but a little over two years after starting my first public-transport job I came into the top 5% of earnings in the UK. The fact that in the UK that is still difficult to live on is down to the government.

[mad_jock]

I don't think there is any doubt that pilots are reasonably paid in the grand scope of things.

But for a while I have seen the fact that the industry needs wannabies constantly ploughing money in.

The revenue would get a chunk taken out of it in VAT.

I can't imagine how many other tax payers wouldn't have a job if the flow stopped.

The UK aviation industry would be shafted and sluggish to respond to the market forces.

So I know its a bit heartless but wannabies getting shafted for 50-100k is how the system needs to be to allow the UK to remain flexible to market forces.

I am glad its not my money though.

[Migas]

Chris: are you a pilot with no monetary benefit?:D

[biaeghh]

What might be an interesting fact is how well attended the flyer exbo is today....imho two things will put the world on a more positive footing is Lewis and Barry do the business over the next few days I will be very happy!!!

[ChrisLKKB]

I know a couple of ex-electricians who are now flying because the work was so tediousBlimey, if they thought being a spark was tedious I doubt airline flying is for them :eek:
Of course if they stick it out or aren't made redundant first in years to come, potentially the pay packet will compensate for the hours of boredom sat in their arses.

Chris: are you a pilot with no monetary benefit?:Dwell I have a CPL but don't earn a living from flying so there is no monetary benefit whatsoever for me right now or the forseeable future. Taken in the context of the post though, as an fo with a loan, there is no monetary benefit over many jobs either. It's not particularly difficult to match or better an FOs wages with or without a degree if you can network and are willing to travel (no different to an FO).

IMO, in many respects if you love flying, given this current climate you'd be better off getting a well paid job outside of aviation, buying a share in an aircraft and flying as a hobby in order for it to maintain it's long term appeal. Having the kudos of being an airline pilot, wearing the hat with scrambled egg on and driving the great unwashed around the sky has no appeal for me personally.

[Lost man standing]

ChrisLKKB

One of them is flying airline, the other GA. Both far prefer the work. Remember time sat on your arse is time available to read a book or a newspaper. Not like constant but dull work.

[ChrisLKKB]

You've never worked as a spark have you :E

[mad_jock]

And reading a book or the newspaper is very frowned apon in the cruise.

I thought one captain was having a heart attack and was ignoring him, in the hope I could log some pic time.

Turned out he didn't like sudoko on the flight deck. The times crossword was OK though

[Migas]

Chris, fair enough. Appreciate your view. You do not earn a living as an airline pilot. This job is not for you and it does not appeal you.

Everyone has different aspirations, and (thank god) we are free to choose our future. I want to fly for a living, and am willing to accept the (very high) risks of this very high profile profession.

In my country, on average airline pilots have higher wages then other qualified (and not less respectable) professions like eg engineers. I do however confess that I have not carried out any analysis of my assumption and this is purely based on coffee converstations. In other words, is rather worthless. Not sure how and where you are basing your own assumption.

Food for though, you need to study 3 years to become a qualified engineer (without a MSc) not to mention plus a few years in college. To become an airline pilot you need 1 1/2 years. If there was no monetary benefits to become a airline pilot everyone would become eg :) electricians.

[ChrisLKKB]

My main point although probably not entirely clear was there are cheaper and safer ways to earn a good crust with better job security, particularly in todays climate. :)

I think a lot of guys get carried away with the romanticism of airline flying which didn't matter quite so much 10 or 20+ years ago when it didn't cost so much to train, airline jobs were more secure and there weren't the oppotunites to earn big money in other fields.

The situation is different now, never has it been so bad for wanabee pilots with extortionate trainning costs, poor job prospects and poor job security. This could well be the turning point in the market for self funded pilot recruitment and we may well start to see a change in the way pilots are recruited in years to come with the MPL or something similar featuring quite heavily.

IMO One possible scenario could be, once this current wave of dreamers pass through the mincer with few if any getting jobs it may make the next few generations of wannabees think harder about their options, assuming the situation hasn't improved (and I think that's unlikely for some time).

Eventually it may reach the point where there are insuffient fatplers to satisfy demand and the airlines may decide to take a more active part in pilot trainning in order to meet their needs.

[Aerospace101]

Eventually it may reach the point where there are insuffient fatplers to satisfy demand

Never. There always has been and always will be an oversupply of fATPLs.

The question is actually will there be a supply of good enough quality.

Because at the moment, for at least 1 major uk airline this is a big problem, and has been for a while...

[biaeghh]

Hurrah,
One out of two so far, Lewis is the man...now all we need is Barry to complete the double tomorrow and those green shoots of recovery will start to emerge
!!!!

[pilotmike]

Hamilton's victory is likely to boost mainly the Swiss economy.

[ChrisLKKB]

Never. There always has been and always will be an oversupply of fATPLs.There was a time, quite some time ago when airlines were screaming out for pilots and were known to call up flight schools asking when they can expect more recruits to come through the system (or so i'm told). Some of the more senior members may be able to confirm or debunk that.

This will probably be a long painful recession which significantly reduces expendable income and available credit. With training costs so ludicrously high and unlikely to come down my theory may not seem so far fetched in a year or two.

btw Hamilton/Lewis/Barry ???

[Aerospace101]

I know the times you are talking about:

when airlines were screaming out for pilots and were known to call up flight schools asking when they can expect more recruits

Again, this was airlines calling up for fATPLs - fATPLs of Quality. Because the market was saturated with rich kids who'd bought their way into training establishments.

I'm telling you now, the experts at the likes of GAPAN are never expecting a shortage of fATPLs! from the horses mouth

[ChrisLKKB]

We'll see what this recession brings.

This is only one scenario but, I can't see a 70K + price tag for training being sustainable in a long drawn out recession and I can't see ftos dropping their prices.

I have a feeling this recession will be much longer than any we've seen in modern history, attitudes and spending habits may change dramatically...and they need to. (either that or the airlines will end up being over run with even more nathans than they are already)

[rogerg]

Again, this was airlines calling up for fATPLs - fATPLs of Quality. Because the market was saturated with rich kids who'd bought their way into training establishments.


I can't see why "rich kids" can't make good airline pilots?

[ChrisLKKB]

I suspect the issue was more to do with the quality of the person rather than the quality of the skills.

[biaeghh]

Chris and the welsh wizard,

Come on guys, lets celebrate...Lewis is the man, lets see if we can turn some of this negativity around!!!

Go on Barry 'O Barma,make it a double.

[ChrisLKKB]

WTF is Lewis?

I'm not sure a victory for OBama is anything to celebrate, not yet anyway. He's a Democrat like Clinton who some consider to be responsible for the subprime mortgage crisis.

[rogerg]

I suspect the issue was more to do with the quality of the person rather than the quality of the skills.

I cant see why "rich kids" can't have have fine personal qualitys as well.

[ChrisLKKB]

Me neither, it's just one of life's mysteries ;)

[rogerg]

Me neither, it's just one of life's mysteries
Very droll

[biaeghh]

Chris,

You are so boring!!!!

and there was me thinking you were worldly wise, Lewis Hamilton is the new BRITISH F1 CHAMPION...yeh!!!!!! so come on lets be positive for a change, i know it is not part of your psychi but go on give it a go....I am sure you can do it.

[wilky]

I got the humour Chris, i thought it was witty!!

[ChrisLKKB]

bia...You watch formula one and call ME boring!

We really are in dire straights when all there is to be positive about is the fact that the guy who can go round and round in circles in a car quickest happens to be a British tax exile.

[biaeghh]

So what floats your boat Chris, ??
The price of oil is still dropping, the interest rate is due to drop this week.. Barry looks like he is a winner.

Come get a realtiy check or maybe join the daily mail who have been preaching this nonsense since the early part of the decade.

This is not the end of civilisation, just a recession that will of course affect people.

Just a parting shot, Vince Cable cracked a jokle this week...

Q/ What is the difference between a banker and a pidgeon???

a/ the pidgeon can make a deposit on a aston martin!!!

Boom Boom

[rogerg]

Terry Wogan did that one 3 weeks ago!

[ChrisLKKB]

Generally my outlook for this country is gloomy but generally it doesn't bother me much because it doesn't bother most people. Now the economic outlook is gloomy, very gloomy and it does bother me because it is bothering a lot of people right now and will bother many more before things turn around.

Hundreds of thousands of people will loose their jobs and their homes, tax deposits are plummeting and benefit claims will be soaring. Our countries wealth has been squandered, the pension fund has been plundered, personal pension funds have been decimated and there's no recovery looming on the horizon...oh and we're up to our eyeballs in debt, then there's the small matter of the nations youf going round stabbing each other.

No amount of whistling 'always look on the bright side of life' can change that. If you want some positive spin it's that Bush is on the way out although sadly he and Blair probably wont be tried for war crimes.

I see nothing else positive about the up coming US elections, there's a choice between a huge unknown and an old guy who's in poor health and if he dies he'll be replaced by a vindictive looney creationist bint. Look to the west and you'll see a huge dark cloud hanging in the air about 3000 miles away and as ever it will be coming in our direction.

Civilisation! What civilisation ???

[biaeghh]

sorry Roger I listen to the great man himself, but missed it.

Chris,

Why are you so interested like WWW in patronising the viewers to this forum. The reality is that you would have to have your head buried near the centre of the universe not to realise there economic problems out there...but then again you did not know who lewis is, so you are probably living in warmer climes.

What is your connection with aviation, do you work in the industry???

You seem to be very negative about everything which is quite sad, but hey ho...

as for our tory friend lastman do you not remember thatcher:ugh:

[Philpaz]

as for our tory friend lastman do you not remember thatcher


You obviously dont, she was the best thing to happen to this country in decades. She broke the back of the unions that were making our economy stagnate and helped get the country out of billions of dollars worth of Labour debt. But hey ho, the people that cant be arsed reading a manifesto are aloud to vote and so Labour and its army of stabbing chav followers get back in power and screw it all up again......and the cycle continues......

The difference this time will be that clueless Cameron has got no idea what he's doing and less charisma than last weeks road kill. We need another Iron Lady/Gentleman to take the reigns, tell Europe where to go swivel, kick the Beurocrats back to Brussels, slap the chavs in to the low income void left by the euro migration boom and get this country back on its own two feet.

Any Takers?????????

[ChrisLKKB]

Bia, You might see it as patronising, I see it as trying to point out the futility in giving the example of a British guy driving a racing car as something to be positive about. It's a bit like falling in a cess-pit then finding some toilet paper.

I doubt the family who loose their house, the bloke who has to work until he's 80 or the guy who is made redundant will actually give a monkey's about what a ex-British tax exile gets up to. It's rather crass don't you think.

You say i'm negative about everything yet if you look at the majority of my posts i've always tried to put a positive spin on the reality we are all facing.

[ChrisLKKB]

We need another Iron Lady/Gentleman to take the reigns, tell Europe where to go swivel, kick the Beurocrats back to Brussels, slap the chavs in to the low income void left by the euro migration boom and get this country back on its own two feet.

What we need is a dusty old bald bloke in a moth eaten taylored suit who spends his evenings reading the financial times sat in a well worn chesterfield chair in his gentlemans club while sipping on a cognac...preferably smoking a pipe.

It's a shame Vince Cable is Lib Dem :{

[Wee Weasley Welshman]

Ok - lets ease up on the politics and stay focussed on economic news and its impact on the aviation industry.

WWW

[Alex Whittingham]

Oh yes, of course. It's annoying really, these pesky airlines just don't want to be talked down by people who obviously know better than they do that they should be going bust.

Ryanair's October figures 18% up on the year before, load factors the same. Ryanair.com (http://www.ryanair.com/site/EN/news.php?yr=08&month=nov&story=pax-en-031108)

Easyjet are reporting tomorrow, I believe.

[Re-Heat]

Load factors and revenue are irrelevant - costs and cashflow are king.

Their own headline on their results was "Ryanair Half Year Profit Falls 47% To €215m" - the margin fell from 26% to 12%, and p9 of the presentation states "pay freeze and redundancies implemented".

There's nothing like a taking choice phrases from an investor presentation now, is there, Alex?


The reality is that Ryanair are strong, will probably continue to grow, and you may have a chance to get experience there. However, they are a business, not a charity, and you enter that business with full awareness of how they run their operations.

[WindSheer]

Reading the metro today, O 'leary still boldly stating that by christmas there will only be Ryanair, BA, Lufthansa and Virgin left. What a complete and utter :mad:
Does he really think that people are going to read that and only book with Ryanair for low cost flights? :mad:

[DUXBY]

Reading the metro today, O 'leary still boldly stating that by christmas there will only be Ryanair, BA, Lufthansa and Virgin left. What a complete and utter http://static.pprune.org/images/smilies/censored.gif
Does he really think that people are going to read that and only book with Ryanair for low cost flights? http://static.pprune.org/images/smilies/censored.gif


I know but you've got to love his humour. Am already looking forward to his next statement he cracks me up.

At the end of the day when you add the hotel and spending money to your £5 flight that weekend break still looks expensive these days.

[Alex Whittingham]

Ah but didn't they all laugh at him when he left his fuel unhedged. How unsophisticated!

[Wee Weasley Welshman]

Alex - something you want to get off your chest? Hats on..

WWW

[Re-Heat]

Ah but didn't they all laugh at him when he left his fuel unhedged. How unsophisticated!
It is not a matter of being sophisticated or not - buying forward has been part of the economy since farmers in the 1700s sold crops, tulips, pork etc on forward agreements, and traded futures are an established and quite simply business.

Ryanair thought the price rise was unsustainable, but slightly bottled it when it stayed around 120-140/bbl for a few months. Fortunately that has not hindered them in the long-term.

[Wee Weasley Welshman]

They're firing the big guns now. Interest rates are back to 1952 levels and in real terms lower than that. My guess is the ECB will follow suit ASAP.

Its not gonna work though.


WWW

[spinnaker]

Wasn't it a month or so ago, that the BoE was carping on about high inflation? Now they cite undershooting the 2% target as a problem. Hmmm. I think myself and one or two others here were talking about the threat of deflation, well here it comes. The IMF has reworked its forecast for the UK downwards to show a contraction of 1.3% during 2009. That's a shift in opinion of 1.2% in a matter of a few weeks. Staggering.

[dublin_eire]

Ah but didn't they all laugh at him when he left his fuel unhedged. How unsophisticated!

But, in fairness, they did get it right. Their timing mightn't have been great but they did expect a reduction in oil which has materialised...... That's business, you can only forecast and predict so much and you will make mistakes. It's how you work around it that matters and I think the no fares, no taxes is a great idea. He keeps occupied seat numbers up that would have otherwise been unoccupied while taking custom from other airlines over winter months. Genius if you ask me....

[Wee Weasley Welshman]

This is the bottom line:

British Airways profits plummet


BA says it should make a small profit for the full financial year
Half-year profits at British Airways have fallen 91.6%, with the airline blaming "incredibly difficult trading conditions" for the plunge.

BA said pre-tax profit totalled £52m ($81.6m) between April and September, down from £616m a year earlier.

Willie Walsh, BA's chief executive, said the period would "be remembered as one of the bleakest on record".

BBC NEWS | Business | British Airways profits plummet (http://news.bbc.co.uk/1/hi/business/7714763.stm)



As we've only seen the first upticks in unemployment and repossessions so far and both will skyrocket in 2009 I think we can quite confidently predict losses for most airlines next year. BA are already parking Jumbos in Cardiff.

It really is 1990 again. Pilots will be flipping burgers in McDonalds again. Luckily McDonalds are doing well and hiring..


WWW

[spinnaker]

dublin_eire

The thinking of MOL could be absolutely correct. I read somewhere, that Ryanair have about £1b cash reserve. He can, or is using that reserve to capture market share and push competitors out of business. BA have reported a massive drop in profit by over 90%. The trick that MOL needs to pull off, is capture enough market share before the cash reserve runs out. Remember that the increased traffic loads on Ryanair is not new business, but rather someone else's business. That cash reserve does not have to last the whole time of the depression either, just long enough to kill off the competition, that's all. If I were MOL, (and everyone is glad I'm not) I would be planning beyond winter, I would be making sure my airline could inflict fatal wounds to my competitors during the honey season, SUMMER. I would also be operating at a greatly reduced rate from a number of airports, because Ryanair will be the only airline of significance operating.

I don't see anything to celebrate in the upbeat figures that Ryanair publish, because they just reflect the dire mess that the rest of the industry is in.

If MOL is correct, and his plan works, Then we are about to see low cost air travel take on a whole new meaning. If or when they recruit the salary will amount to dole money + 5%.

[heli_port]

dam it www i was going to post that story :p

The mood here at OAA with my classmates has changed allot. The air of optimism has gone and the reality that most are going to struggle to make their loan payments, if only they had listened to you www :ooh:

Ah well cheer up its beer day!

http://www.mysmiley.net/imgs/smile/party/party0005.gif (http://www.mysmiley.net/freesmiley.php?smiley=party/party0005.gif)

[PosClimb]

dam it www i was going to post that story http://static.pprune.org/images/smilies/tongue.gif

The mood here at OAA with my classmates has changed allot. The air of optimism has gone and the reality that most are going to struggle to make their loan payments, if only they had listened to you www http://static.pprune.org/images/smilies/icon25.gif

Ah well cheer up its beer day!


Timing is everything. These guys are about to graduate at the wrong time, namely, at the start of a downturn.

I feel very sorry for them. Huge debts and no job, and no likelihood of a hiring cycle again probably for several years.

The ones without debt will be okay at the least, but for the ones who burrowed against parent's houses.... not so good...

[Alex Whittingham]

Sorry, dublin_eire, I was trying to be ironic. I'm a great admirer of MOL's clarity of thought, even though he can be a bit of a maverick. If you look back on the forums, mostly R&N, his failure to hedge his fuel in the late summer, around the time the 'experts' were predicting $200 a barrel by Christmas, was widely mocked. Turns out he was right.

I can't see any evidence to suggest Ryanair's increasing traffic loads are at the expense of any other airline, if that's what you mean by 'somebody else's business', Spinnaker. Low Costs can't usually afford to compete on the same routes. Difficult to see your case for 'the dire mess that the rest of the industry is in' as well. The three major UK short haul airlines all seem to be doing well, particularly considering the economic battering our financial brethren have visited on the country. Granted, profits are down but Ryanair's €215m in 6 months is not to be sniffed at.

[Alex Whittingham]

I can't find these on Easyjet's website but a post elsewhere on PPRuNe has the Easyjet October figures as:

Month ending.......October 2008.....October 2007.......Change
Passengers...........3,959,194..........3,344,916.........18 .4% up
Load Factor.............83.9%..............82.5%............1.4 down

[3Greens]

Spinnaker

I trust you are aware that when an airline is said to have "XXXbillions" in cash reserves it doesn't mean MOL could plug his debit card into the hole in the wall and hey presto, the balance shows XXXbillion. Most of it is cash predictions based on forward bookings that may or may not be already paid for. The problem at BA is that forward bookings have dropped sigificantly as they have at Ryanair. The often mooted £1billion cash reserves is used as equity to get loans from the banks for such aquisitions as you suggest...problem is the banks aren't lending at the moment - not even to Ryanair. I'm afraid the global domination you suggest is fundamentally flawed.

[spinnaker]

3Greens

Thanks.

"I'm afraid the global domination you suggest is fundamentally flawed. "

I wouldn't go as far to suggest King MOL is going to dominate the world (if he does, I want to get off). But there is no mistaking that he intends to dish out as many fatal blows as he can. Whether it works or not is going to be down to how deep the airlines pockets are. Some, I suspect are not that deep at all.

We shall see.

Alex Whittingham

I don't dispute the LoCo numbers are up, its just where those passengers are coming from. I find it difficult to accept that the air travel sector is bucking the trend, when every significant sector in the economy is now in decline. I believe those numbers are largely made up of existing business. Its already, widely reported that traffic across the sector is down and an overcapacity exists over and above seasonal adjustments.

[Aerospace101]

WWW - BA share Price up 20%

Now, how much does it cost to get my BA cadetship at OAA? :}

[Wee Weasley Welshman]

The easyJet figures now incorporate GB Airways which was bought earlier in 2008. The fleet size is now static or shrinking for this year and next. Redeployment of parts of the fleet to Italy is a distinct possibility as the UK economy goes down the toilet and Alitalia winds down (if it does).

WWW

[Alex Whittingham]

GB only brought 200,000 odd passengers a month with them, not enough to account for the increase. March 08 Statistics (http://www.easyjet.com/en/news/mar_08_passenger_statistics.html). Even taking GB into account there are still an extra 400,000 passengers flying each month.

[VFE]

Nice to see some stats here but the bottom line is that people will always need to get from A to B...

I say keep plugging away at your studies and worry about the job market when you finally have your qualifications. I am not saying it will be easy to get a job with an airline but then again, when has it ever been easy? If you are contemplating undertaking professional pilot training or are contemplating borrowing/remortgaging I'd say wait. For Gods sake wait!

WWW says it's 1990 all over again but that's just speculation from someone who wants to show they've been around the block a bit. This reccesion could very well damage many airlines, but it might just the same be a storm in a tea cup. At the end of the day air travel has grown hugely in the last 18 years so comparrisons with the last downturn are a little redundant (scuse the pun!) if you ask me.

BA were laying Jumbo's off weeks ago. There has been plenty of warning about this 'crisis' and governments and banks the world over have taken unprecedented action. Hatches have been battened and budgets reduced. The media love the drama and thrust it down all our throats but fail to realise that we're in a new age and anything (including positives) could happen.

Keep yer chins up. I don't think it's gonna be easy but like I said above - it never has been.

VFE.

[Wee Weasley Welshman]

WWW says it's 1990 all over again but that's just speculation from someone who wants to show they've been around the block a bit. This reccesion could very well damage many airlines, but it might just the same be a storm in a tea cup. At the end of the day air travel has grown hugely in the last 18 years so comparrisons with the last downturn are a little redundant (scuse the pun!) if you ask me.



I was more worried about my GCSE's in 1990 than the recession so I haven't been around this particular block before.

You think that making comparisons with the previous serious recession (which is what we now have) are redundant. I can't understand that point of view. Sure history never repeats itself exactly but there has to be some merit in studying it as a guide to the present and future. No?

To replicate the loss of Dan and Air Europe this time the industry would have to see, say, easyJet and Thomson go bust. Roughly 3,000 pilots between them because, as you point out, the industry has grown enormously.

The tiddlers like XL and SilverJet going pop is neither serious nor a suprise. Very bad news for Wannabes but not a disaster.

My strong suspicion is that 2009 will present a Wannabe disaster.


Storm in a teacup this will not be. Point in history is far more likely.

WWW

[Desert Budgie]

There is no use comparing loads from October 2007 with October 2008 as business travel numbers would be relatively similar and families who had booked holidays will have done so well before the sh*t really started to hit the fan.

The big test will come during the approaching Xmas holidays and next years Easter and Summer breaks. Airlines traditionally charge 'Peak' fares during these periods to offset the losses or poor profits during the Off Peak months. However with families spending their holidays at home to save the pennies, airlines will have to charge off peak rates all year round to fill the seats. This is an impossible situation for the airlines and their tight ships!

And, don't forget about the decreasing value of the pound. I live in DXB and the exchange rate has fallen from 7.2 to 5.6 dirhams to the pound. Thats huge, and its a situation echoed around the world. Expect to see more families holidaying at home or in Europe.

Its going to be a disaster, and wannabes need to know that so they don't end up 'flipping burgers at Mcdonalds.' Will it be worse than 1990? Of course it will, as there are many more airlines to go bust or need to scale down.

Please don't get nieve folks. Wait until February when the airlines are reeling from their Xmas losses and battening down the hatches to prepare for their 'Off Peak' months.

Another few cents from DB :ok:

[Grass strip basher]

I now live in Dubai and echo what Desert Budgie has said... it is now bloomin expensive for Brits to come here... although nice for us paid in Dirham when we trot off back home.

Face it even the most optimistic people now appreciate 2009 will be a complete write-off.The best we can hope for is a stabilistation in 2010... There is no point starting training for at least 12 months if you ask me.

That said came back on a packed 380 from NY on Thursday night... wonder how long that will last....

[smith]

I hear Mr Brown is considering cutting taxes, would be nice if he scrapped APD for a couple of years while he's at it.

[Re-Heat]

Some food for thought on the BA "profits" of last year - FT.com:


FT Alphaville » Blog Archive » A profits engine, or simple engineering, at BA? (http://ftalphaville.ft.com/blog/2008/11/07/17968/a-profits-engine-or-simple-engineering-at-ba/)

A profits engine, or simple [financial] engineering, at BA?

The shares may have jumped 22 per cent at the opening on Friday - but does the unexpected forecast of a 1 per cent increase in revenues at British Airways really detract from the overall gloomy picture painted by the interim figures?

From Bloomberg:

The net loss of 49 million pounds ($77 million), or 4.3 pence a share, compared with net income of 493 million pounds, or 42.9 pence, a year earlier, British Airways said in a statement today. Analysts had estimated profit of 64 million pounds. Sales rose 6.4 percent to 4.75 billion pounds, beating the average analyst estimate of 4.57 billion pounds.

Oops!

What makes it worse, is that business has been in dire straits for some time now. The much-lauded 10 per cent operating profit margin - barely achieved last fiscal-year and used as a benchmark to restart dividend payments - was helped along by a clever accounting trick, not a genuine improvement in business levels.

The airline changed the depreciation period for their RB211 engines, generating a £32.5m decrease in annual depreciation charges, et voila, CEO Willie Walsh gets his 10 per cent margin despite the fiasco that was Terminal 5’s opening and rising fuel costs.

Now the realities of BA’s operating environment are catching up on them — the rapid shrinking of their premium business segment, heightened competition from competitors’ like Deutsche Lufthansa and management preoccupied with what looks to be a floundering merger attempt with Iberia.

At least fuel costs are coming down. Oh wait.

The fuel bill for the year is still expected to be some £3 billion as exchange and hedging have offset lower fuel prices.

[Alex Whittingham]

Yes Topslide, I heard you, but putting your simplistic statement in capital letters and saying 'one last time' doesn't make you right. You gloomy lot just keep restaing your case to each over over and over, convinced that parotting Mr Preston makes you right and everybody else is, stupid, naive, etc.. Actually you only have an opinion, and there are those whose opinions differ from yours.

[Aerospace101]

CTC Press Release April 2008:

PILOT SHORTAGE LOOMING, BUT INTEREST IN BECOMING AN AIRLINE PILOT SOARS
Reporting on a recent Pilot Resource Forum hosted by CTC, at which the senior management of many of the UK airlines were in attendance, the Founder and Chairman of CTC, Capt Chris Clarke,noted that the anticipated requirement for new pilots to enter the airline industry over the next year was at an all time high and, according to the expectations of the airlines present at the Forum, is expected to be in excess of 1800 .

1800!?!?

How times change. Lucky if it'll be 18 new joiners now over the next year...

[PosClimb]

CTC Press Release April 2008:

Quote:
PILOT SHORTAGE LOOMING, BUT INTEREST IN BECOMING AN AIRLINE PILOT SOARS
Reporting on a recent Pilot Resource Forum hosted by CTC, at which the senior management of many of the UK airlines were in attendance, the Founder and Chairman of CTC, Capt Chris Clarke,noted that the anticipated requirement for new pilots to enter the airline industry over the next year was at an all time high and, according to the expectations of the airlines present at the Forum, is expected to be in excess of 1800 .
1800!?!?

How times change. Lucky if it'll be 18 new joiners now over the next year...
The Pilot Shortage has been looming just around the corner for the last 30 years!

Seriously, though, GM and Ford are staring bankruptcy in the eye. That is major. I wouldn't be worried about securing a pilot job... I'd be worried about securing any job for the next few years until the system straightens itself out again.

[BitMoreRightRudder]

it is staggering just how many people are either unaware or ignorant of the word 'yield', and it's effect upon the business. People think full aircraft means a successful business and visa versa.

But generally a full aircraft, for the big locos' at any rate, does mean a successful business. I think Alex's point about load factors is fundamentally correct.

You mention yield management and then talk of selling 1p tickets - that is just the headline price. There will always be a percentage of seats sold late, at a high price. High load factors therefore means more expensive seats are sold, if an airline is any good at yield management in the first place.

Also high load factors means more ancillary revenue generated - I work for a loco and all our cabin crew have battered into them is spend-per-head targets. The big area of profit growth is what is sold on board, so the load factor is hugely important. I take your point that filling an aircraft with pax who have paid the square root of nothing for the seat is not a sustainable business plan, but a high load factor is still important. The cost of the seat in loco world is becoming secondary to the profits made through what is sold on board, for that you need bums on seats.

[Alex Whittingham]

OK, so the formula for profit = success relies on number of sales, ticket price, load factors and costs with additional peripheral deals from airports and regional administrations and ancillary sales on board.

The arguement on this thread used to be that passenger numbers would fall but we have evidence that numbers of ticket sales are holding good, as are load factors. Costs should be on their way down now that oil is back to $65 a barrel and there's no upward pressure on wages, commercial rents etc. Ryanair fired a very big shot across the bows of any regional governments by pulling out of Valencia last month. So what have you got left? Any evidence that the mean price per seat has fallen significantly?

[Aerospace101]

Alex, forward bookings are almost nonexistent for next year with some of the big carriers. Which is almost unheard of.

As we know, CASH IS KING. NO CASH, NO FLIGHTS. NO FLIGHTS = NO AIRLINE.

NO AIRLINE = NO JOBS :{

[dublin_eire]

The airlines out there who are selling tickets for 1 pence and suffering the losses on whatever cash reserves they may have are playing a VERY dangerous game indeed. Profits are falling through the floor and absolutely no one has any idea just how deep and how long lasting this recession is going be. That money will only last so long, and if the fundamentals of the business are not sound and the demand is extremely price sensitive, irrespective of product, then there can only be trouble on the horizon. Of course, certain airlines have made most of their money through having purchased large numbers of aircraft cheaply. They, however, are the self same airlines who are now finding the bottom has dropped out of the leasing market, and in a time when they wish to reduce capacity and consolidate, they are still getting new aircraft delivered. Despite this, and once ambitious expansion plans, recruitment in the UK has all but ground to a stuttering halt.

You sound like a pessimistic gobbo to me..... Cheer up! Seriously, things mightn't be as good as they have been for another while to come but the airline industry ain't just gona grind to a halt. It's every sector feeling the pinch and if you know anything about economics these recessions are recurrent and we will come out the other side either by circumstance or by the help of governments. You make it sound like doomsday. Jaysus Christ!

[Wee Weasley Welshman]

Which airlines went bust in the last recession and what proportion of the market did they represent?

Scale that answer to today and then be very afraid.

The UK could lose 300 jets over the next 2 years. Easily.


I don't give a rats ass about a couple of percentage of load factor here there or anywhere. The only survival plan amongst UK airlines is to outlast their competitors. Then take their market share and restore margin.

This is a cash bleeding competition. Nothing else.


WWW

[Wee Weasley Welshman]

I promise Wannabes on pain of eating my Kangaroo skin hat with salt and pepper that in 2009 several significant EU airlines will go bust. By several I mean >10 and by significant I mean having more than >30 jets.

That alone will put 1,000's of unemployed pilots onto a stagnant market. Rush to join them at your peril.

WWW


ps People said I was doom mongering armchair economist 18 months ago when I said a house price crash was going to happen. 12 months ago when I promised them a large recession was afoot I was castigated. Of course this time I could be wrong.

[student88]

WWW, don't worry. I have faith in you.

You're one of my idols, right up there with Gandhi and Britney Spears.

S88:ok:

[ali1986]

WWW you somehow seem to have some control in what the future holds do u have some sort of mystical power?, if so please say that it will get better and there will be jobs for everyone and then it will!. hm well it was worth a try i supose hehe

[Wee Weasley Welshman]

Predicting this mess and its seriousness was the easy bit. The recovery and to what is a much more challenging question. The only thing I know is that the debt bubble of the past half decade will not return for at least a couple of generations.

Everybody is going to have to work a great deal harder to support their lifestyles. For the first time it seems likely that peoples parents generation will have been better off than their own.

WWW

[JohnRayner]

Of course this time I could be wrong.

Of course you could. Mystic Meg you ain't

A brief trawl hereabouts demonstrates however, that you'd have to be a fantastic optimist of the "fingers in ears lalalalala I'm not listening" type to want to bet against you.

:cool::cool:

(btw. Got any lottery tips?:})

[RoyHudd]

WWW, you are right. I too saw the dotcom, property and credit bubbles coming, and am doing ok, thankfully. For what it's worth, I and most financial pundits believe things are going to get very much worse before they get better. Particularly in the USA and the UK. The impact on commercial aviation will be severe.

Young (or not-so-young) would-be pilots who have not yet committed funds....please WAIT! Your time will come. I have no vested inteest in writing this, and will retire in 3-4 years, hopefully to make room for a newbie. For now, those of us at the sharp end are all hanging onto our jobs.

[ChrisLKKB]

You gloomy lot just keep restaing your case to each over over and over, convinced that parotting Mr Preston makes you right and everybody else is, stupid, naive, etc.. Actually you only have an opinion, and there are those whose opinions differ from yours.

Does the IMFs prediction for this country carry any weight with you ?

[Re-Heat]

Alex,

Sorry, but you are on the wrong side of the argument here - it is not simply opinion, but very much a fact of airline economics that passenger numbers on their own have very little bearing on financial health.

I must also take issue with this:
Costs should be on their way down now that oil is back to $65 a barrel
In fact - no - costs might even have risen, as sterling has been shot to pieces. Falling currency = increasing costs if denominated in dollars.

[cc2180]

I agree the next 18-24 months will be rough, but noone knows how well we can recover. You cannot assume it will last an entire generation, although obviously it makes for better drama to post it.

We have more experience and understanding in dealing with recession, and a UK government willing to take/lead significant early action.

Yes it's unfortunate to be graduating out of an FTO now, but telling wannabes to wait for 5 years to start training is just wrong.

Why would we listen to the economical rantings of people who cant even spell correctly? Just laughable.

Timescale for future economic recovery will be based on backbone more than anything; something that's largely unpredictable.

[PosClimb]

Yes it's unfortunate to be graduating out of an FTO now, but telling wannabes to wait for 5 years to start training is just wrong.

What's your connection to the flight training industry?

[Grass strip basher]

I have contributed less to this theme recently but confess to being absolutely gobsmacked that relative senior people in the training industry can still say with a straight face that "its not so bad". In the face of such overwhelming evidence to the contrary these people just underline that people will tell you anything to get you to part with your hard earned cash to chase a dream. BUYERS BEWARE!

On a more positve note at least we are now getting into the recession proper. The "phoney war" was getting a bit tiring. Its like being an alcoholic... the sooner you admit you have a problem the sooner you can start working your way out of the hole you have dug. Next year will be one of the toughest for decades.... Zoom, Excel etc.... you ain't seen nothing yet... more will go bust.

One thing people haven't talked about enough on here is Sterling (the currency not the airline) going through the floor. The challenge may well now be to choose between deflation and inflation.... the government will probably chose the latter meaning sterling could fall even further. A 20-30% increase in the cost of that trip overseas at a time when pressure is on your finances isn't going to help with hoilday bookings. God it is going to get ugly.... I genuinely fear coming into work at the moment and turning on the screens to see what Asia is doing... :ooh:

[Alex Whittingham]

You misunderstand me. I completely agree with WWW that now is a time for wannabees to be very cautious. What I'm disagreeing with is the certainty that five or six regular posters on this thread have that we're all going to be living on the streets in a year's time. I'm saying that it isn't certain at all and that the economy could still go either way. I don't know it's going to get better in the spring, I'm not even presumptious enough to think it's going to get better in the spring, but I do think it could get better way before Dr Doom and his mates do.

I've said it before. It's easy, when there's an economic trend, to say it's going to continue. It is less easy to spot the turnaround.

[chickentikkamasala]

Guess what it's time for wannabes to be cautious. Batten down the hatches there's a recession on. Guess what www was the only one in the world to predict it.

[99jolegg]

Guess what it's time for wannabes to be cautious. Batten down the hatches there's a recession on. Guess what www was the only one in the world to predict it.

What a heart-felt tribute...you even use the same phrases as WWW. I'm sure his newly founded position of World Economist will go down a treat...as will his newly founded pet :E

Seriously, I agree with Alex. The only thing about the future that this thread provides is opinion. Therefore, anybody who predicts the future is simply guessing or hypothesising based on previous experience and economic trend. Saying that anybody who dares either disagree for one reason or another, or wants to start training in the near future (to come out of the system in 2 years) is naive, stupid, ignorant or all of the above, is doing nothing more than showing their own ignorance!

Maybe you're wrong. Maybe I'm wrong. Maybe the person that posts next is wrong. However, nobody knows that anybody is wrong.

For what it is worth, I trust the aviating "heavy weights" in that 2009 will be bad. The probability that it'll be bad is quite high, therefore, to suggest that it will be bad is a natural step that most people like to follow.

Don't get me wrong, the advice that is given on this thread (in some parts) is sound and logical. I accept that this could be horrific for 3-4 years. I also accept it might not be as bad as some say.

[Wee Weasley Welshman]

Anybody who wishes to make a contribution here whose view is more half full than my half empty is utterly welcome.

One sided rantings are of some but limited use to Wannabes trying to form an opinion. A hotly argued debate where views are contested and contrasting opinions put are of more use and provide a better read. Therefore whilst I am happy to play Bear its a much better play if other chip in as Bulls. Its never been discouraged and never will be.

Its quite right to question anything I say. A great danger is to make one or two calls correctly and then believe infallible insight has been discovered. It ain't so. I've been right about a HPC, how bad the credit crunch would be and about a recession. I may well be completely wrong about the upturn. It doesn't really matter any further than at least the benefit that Wannabes might get from having heard the arguments from people who aren't trying to sell them anything and who understand the business.

At the moment I predict a two year recession which started in Q2 2008. Best point for Wannabes to entering the job market would be Sept 2011. That's my optimistic projection.

I actually think that things will be worse than the 1990-91 recession because this time the whole developed world is in phase. Because the scale of the financial/banking crisis is usually closely correlated with the following recession and this is the worst money crisis since 1938. Because the aviation boom of the past decade has been unprecedented. Because Cheap Oil is gone forever this time. Because the house price crash is already twice as bad as the 1990's one and I believe that to be a close proxy for the following recession. Because in the last recession the industry was massively fat and wasteful and could respond by rationalizing and by inventing LoCo's and this time there are no new inventions at hand.


Its going to be worse this time I think. I've bought my farm and if needs be I can survive on the dole, good looks and charm... <cough> :suspect:


WWW

[BitMoreRightRudder]

Er, no it doesn't. I work for a no frills carrier and know full well that a full aircraft does not necessarily mean a sound business. There is far far more to it than that. The whole low cost model is based around the development of other revenue streams and ancilliary spending alongside cutting unnecessary cost out of the actual flying operation. I believe i'm right in saying that Ryanair make very little money from the selling of tickets for transport from A to B.

Which is exactly what I said in my post topslide. I'm sorry but I don't understand your argument on this one - you are contradicting yourself. The development of revenue streams are all linked to high load factors, ryanair get away with making very little on ticket sales by filling the aircraft and selling to a captive audience. I'm not suggesting all a carrier has to do is fill its a/c, but a full aircraft means maximum opportunity to exploit said revenue streams.

[Alex Whittingham]

Seeing as you base your arguement on the statement that ticket prices have fallen, can you evidence this, particularly for Low Costs?

[Alex Whittingham]

They don't appear to be losing money hand over fist, Ryanair made €215m profit in the last 6 months, admittedly forecasting a break-even in the next 6 month period.

[Grass strip basher]

This argument is failling to see the wood for the trees..... sentiment has dropped off a cliff in the last 2 months and that is not reflected in most of the data you are quoting. It is crap and going to get worse. You would have to be mad to pay for an IR at the moment.

Lehmans only went bust a couple of months ago... business class travel will plummet. Economy will follow.

[Jonty]

I have just signed up with OATS, handed over £70k and start tomorrow. Managed to re-mortgage my parents house, although the interest rate hurts!

Do you think it was a bad move?

[Re-Heat]

er, yes. Are you baiting, or have you actually done that? Have you been reading this thread?

Defer!

[ChrisLKKB]

sentiment has dropped off a cliff in the last 2 months and that is not reflected in most of the data you are quoting. It is crap and going to get worse.This is what some people were saying many pages back (probably yourself included). It would seem if it hasn't just happened or isn't happening right now then people just aren't interested.

The exact details may or may not be predictable but you don't need to be Mystic Meg to see there is going to be an unavoidable and protracted lean period for the airlines (and for almost everyone). It's not difficult either to see that right now the best thing to do is to hold off on any plans for trainning, this will go on for at least 18 month and there wont be any growth for years, airlines are aleady over staffed for the future.

I have just signed up with OATS, handed over £70k and start tomorrow. Managed to re-mortgage my parents house, although the interest rate hurts!

Do you think it was a bad move?http://smileyshut.com/smileys/new/Laughing/lol-045.gif (http://smileyshut.com)

If you have (and I doubt that) then at least you can have a warm feeling to know that you are keeping a couple of flying instructors in a job for the next year.

[Wee Weasley Welshman]

Jonty is joking ;)


The most amazing thing is that the large FTO's still have no trouble filling their courses. There really are people signing up this very week.

WWW

[Alex Whittingham]

Again, you misunderstand me. I completely agree that this is a time for wannabees to be extremely cautious, particularly with borrowed money. I am merely observing that the data from the Low Costs, from as recently as October, flies in the face of your arguements and predictions.

Yes, I agree there is a fall in profits but a fall in profits, even to break even, is not 'losing money hand over fist', in fact it's not 'losing money' at all. Having observed MOL over some years I wouldn't be surprised if he is making the most of the economic situation to do a bit of trimming that would not be acceptable to shareholders or employees in the good times but he thinks he can get away with now. It's an old tactic.

[99jolegg]

The whole point of this 1200+ posts is to try and make wanabees realise that now and next year is really not the time to be embarking on a frozen ATPL.

Therein lies the problem! You are trying to make wannabes come around to your opinion!

According to you, December 2009 (for example) is the wrong time to start training, when coming out at the beginning of 2012 could be the right time for some. Indeed, starting training now, could be the right thing to do for some - they could leave their FTO and walk straight into a jet job! On the other hand, they could walk out of their FTO into the tumbleweed for 3 years. You don't know. I don't know. Even WWW doesn't know! :eek: So if we don't know something, how can we convince somebody about something that we have no idea about!

Surely, you must see that trying to dress the future up as fact is futile?

Of course, providing fact, economic trend and opinion is useful to anybody involved in aviation, or looking to become involved in aviation.

[JohnRayner]

Surely, you must see that trying to dress the future up as fact is futile?

Cuts both ways that does. From what I've heard about some recruitment PR at some FTO's recently, you'd be mad not to start up now. Ermmmm...

From what I've seen, I like to think the (admittedly bleak) advice posted here is done so in the spirit of being helpful and honest (albeit, well, a bit bleak)

It's perfectly true to state that everything surrounding this subject is speculation, 'cos it is. But it is based on previous experience, previous known facts and appears to be imparted by people who don't want your money, which I gather is rather the point.

Having ambled through various glossy mags/ sites/ conversations related to training in the aviation industry, I'm quite happy I found this place! (although of course I don't necessarily agree with all I read on it)

:ok:

[no sponsor]

I notice that Ryanair are now only recruiting Cadets and Captains - no 'experienced' first officers according to their website.

I think this is another key difference to this downturn, when compared to others. In the past, experienced guys got taken on, over and above inexperience. Now, this has only to do with the economic benefits of taking on cadets which start at little, or no salary for 6-12 months.

This may be great news for some, but it signifies a really worrying trend for those looking at aviation as a 'career'.

[99jolegg]

I refer to this thread in what I said, what the FTOs say is irrelevant to this thread, of course no business will tell you "don't use us!", in any industry.

Thing is, they have a reason (profit) to try and sway opinion. Whilst not forgiveable, at least they have an excuse!

Of course it works both ways, but I don't see many people on here saying "now is the best time to train....fact!"...and if I did, I'd say the same thing to them as I have just done.

If you think wannabes that visit PPRuNe are bad, you should hear about those that haven't heard anything other than the FTO spiel...they really are the eye-openers!!

[Alex Whittingham]

Well, if any FTOs are suggesting what you say I think they should be named and shamed. From what I can determine even the big FTOs like Oxford and FTE are being quite honest about hiring prospects right now, although they probably aren't following quite the same line as WWW!

[Re-Heat]

Yes, I agree there is a fall in profits but a fall in profits, even to break even, is not 'losing money hand over fist', in fact it's not 'losing money' at all.
At the risk of being a little pedantic, a company that is breaking even is very much losing investors' money, as the value of that money is eroded by time.

Some sobering statistics from some equity research as follows:

February 2009 figures:

US Industry Capacity: -13.8%
International Capacity: -2.7%
Total System Capacity: -10.7%

All announced only - no accounting for unannounced reductions.

Furthermore, largest output loss since early 1980s recession is forecast.

[Wee Weasley Welshman]

Its fair to say that on this forum there is a presumption that we provide the case for the prosecution whilst the flight training industry provides the case for the defence.

Thousands of people work in the flight training industry. Millions are spent on advertising. Products are marketed to people who know little about the industry.

Against this there's the Wannabes forum... not much is it?


So far this recession has been an abstract thing for most. A dinner party debating topic. Well its about to reach the nasty stage. 3 million unemployed will be seen suprisingly quickly. Discretionary air travel and holidays will simply slump as households cut back either out of necessity or fear. Mrs Welshman is in a meeting making people redundant as I type. Its ugly. Its bad. Its going to get much much worse.

The question of whether a major recession is upon us is now answered. It is.

What now needs to be communicated is what is likely to happen as a result. This can be done in several ways. One of them is to look at the last recession and learn about what happened then. From this understanding it is possible to make a guesstimate as to what will happen in 2009/10.

This seems rational to me.

Dan-Air - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Dan_Air)

Air Europe - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Air_Europe)

And as more of an educational point about how many airlines there have ever been which Wannabes have never heard of check out:

List of defunct airlines - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/List_of_defunct_airlines#.C2.A0United_Kingdom)



This is a turbulent industry in more than one way and there's a real big storm on the wx radar right now...


WWW

[biaeghh]

WWW,

I think we are finally getting to the crux of your posts.

You obviously have some sort of issue with the flight training industry, making organisations like the one that trained you out to be messiahs.
What is your problem, if you have such an issue why are you a moderator on a website that I would suggest makes most of its revenue from the same industry you seem to have a problem with.
I don't think Danny would be overly happy when FTOs start to disappear aided and abetted by constant diatribe from yourself.

My thoughts are that if this is such a big deal to you, why don't you do yourself a favour (and everyone else)and get a career journalism or politics.

[JohnRayner]

what the FTOs say is irrelevant to this thread

I have to disagree. Ignoring the positive spin of FTO's when criticising the opinions of some on this site is unfair, since in fact, as mentioned, all that they're trying to do is provide a bit of balance for the wannabe at large in the face of said PR campaign.

Also, the need to make bucks might explain why some people do the things they do, but it doesn't necessarily excuse it. An opinion with no vested interest will always suit me nicely thankyou very much.

As for the repetitive nature of the grim forebodings, well, this thread alone is 62 pages long. I think nearly everything's been said before! It's only repetitive if you keep coming back for more.

On a lighter note, I propose we all start a thread-watch dedicated to spotting the green shoots of recovery via the medium of a positive WWW post. They do exist, and I have read them.

(As an aside, anyone interested in a sweepstake for the time said comment might appear?)

:ok:

[cc2180]

Will Mr.Brown lead the lowering of taxes in the EU as suggested before the summer holiday bookings? Will this announcement be enough to inspire spending and get the wheels of the economy turning again?

Summer is the deadline for many yet-to-be-determined airlines, as many dont have the cash reserves to survive.

Perception is paramount between now and next summer.

People talking about Lehmans. Well Lehmans went down purely from gossip and rumours that it was in trouble. The rumour mill caused a run on the bank, which in turn made the rumours true.

You cannot have only a handful of people decide to keep spending, as they will lose out (wannabe training into a stagnant economy). It needs to be everyone, and the only way to achieve this is through perception. Something that Mr.Brown is utilising.

The economy is built on confidence. Stirring up fear wont solve anything, but will lead to prolonged recession.

Oil has dropped and predicted to hit $50, OPEC even cut production to raise prices, but it didnt stop going down. They are doing another significant cut in production next year to stem the fall.

Governments have already bailed out their banks, lowered interest rates and probably lowering taxes too. All to keep you spending. It's now up to you the consumer to kickstart the economy and help out the wannabe's/unemployed!


But it is based on previous experience, previous known facts and appears to be imparted by people who don't want your money, which I gather is rather the point.

No, the doom mongerers arent after your money. They arent here for public service, although will probably claim it. They are here for their own twisted entertainment. Dont forget that.

It's this exact outlook that will cause the recession to last longer than it has to.

[Re-Heat]

People talking about Lehmans. Well Lehmans went down purely from gossip and rumours that it was in trouble. The rumour mill caused a run on the bank, which in turn made the rumours true.
Trust me, this did not happen. I know. For starters, it was not a commercial bank, and a run on funds cannot exactly happen to an investment bank.

It went down as it ran out of cash in trying to meet obligations, which become more onerous as the share price fell. Yes, it was circular, and rumour pushed it further, but the whole business had been dying for a year or so before it actually happened.

This recession needs to be fearful, to force people to realise that they have to save more to be able to ultimately spend it. Life cannot be lived on credit forever, and the UK has done so for longer than most!

[Wee Weasley Welshman]

biaegh wrote:

WWW,

I think we are finally getting to the crux of your posts.

You obviously have some sort of issue with the flight training industry, making organisations like the one that trained you out to be messiahs.
What is your problem, if you have such an issue why aree you a moderator on a website that I would suggest most of its revenue would appear to come from the same industry you seem to have a problem with.I don't think Danny would be overly happy when FTOs start to disappear aided and abetted by you.

My thoughts are that if this is such a big deal to you why don't you do yourself a favour and getting in journalism or politics.


The organisation that taught me to fly was the Royal Air Force and my present Senior Training Captain. I think neither are messiahs.

As for I don't think Danny would be overly happy when FTOs start to disappear aided and abetted by you. are you trying to threaten me? What do you do down there in Bournemouth? Is it work for a flying school? 90% of your posts seem to be about Bournemouth Airport, CABAIR or flying training..


cc2180 if I was here just for my own twisted entertainment I'd ask how your CTC course was going.


WWW

[Grass strip basher]

"They are here for their own twisted entertainment. Dont forget that."

Geez well I wish that were true.... the last 12-18 months have been a bloody nightmare of sleepless nights and concerns over job security.... I must have missed the fun bit. As did all those friends and colleagues of mine who have already lost their jobs... how is that entertaining with a couple of kids and a mortgage??. :ugh:

People continue to spend beyond their means is not the answer. That got us into this mess. We are heading for a recession that is long overdue... should have happened in 2001/02 but the Greenspan Put just poured more petrol on the debt bonfire.

This is not just about consumer confidence. It is about the global banking markets being screwed.... granted only bank analysts etc properly understand that (+ a few others) because it is bloody hard to get your head around unless you work in the industry.

To give you an example.... trade finance... keeps all those cargos in all those ships travelling around the world. The cost of it has gone through the roof. This means cargos left on docksides and the Baltic Freight Indices going through the floor. Bottom line without trade finance and letters of credit global trade does not function... that is already happening.

To think that a stiff upper lip and continuing to spend will solve this issues is naive in the extreme. A healthy FEAR of debt and a FEAR of living beyond your means would have helped stop us getting into this mess in the first place.

I say again DESPITE ALL THAT HAS BEEN SAID THE MAJORITY OF FOLKS STILL DON'T GET IT.... THIS IS THE "BIG ONE".... IT IS GOING TO HURT... LOTS:sad:

[99jolegg]

I have to disagree. Ignoring the positive spin of FTO's when criticising the opinions of some on this site is unfair, since in fact, as mentioned, all that they're trying to do is provide a bit of balance for the wannabe at large in the face of said PR campaign.

Also, the need to make bucks might explain why some people do the things they do, but it doesn't necessarily excuse it. An opinion with no vested interest will always suit me nicely thankyou very much.

As for the repetitive nature of the grim forebodings, well, this thread alone is 62 pages long. I think nearly everything's been said before! It's only repetitive if you keep coming back for more.


I think you're misunderstanding what I'm saying. Either that, or you stopped referring to my post.

How much people bleat on about how bad it is, is irrelevant for me. If it lasts 100 pages, it is fine by me; I dip in and out to keep current with the latest info, ignoring the idle ramblings, of course!

What is pointless, though, is those that tell us they are right, because it is their opinion. Nothing factual, just that because this happened on this date, it will end up like that in the future. However possible it looks, it isn't certain so to suggest that they know what will happen and to suggest that there is a specific time frame when people should commence their training (only when this said person sees fit to announce this time, of course) is pointless and counterproductive. It negates the good information we get from those that express valid opinions.

Like I say, the fact it is 62 pages is irrelevant - if it is 62 pages of worthwhile stuff, great. If it is 62 pages worth of crap...not so great.

[Wee Weasley Welshman]

Worlds biggest car company share price (apologies to Toyota):

http://ichart.europe.yahoo.com/c/2y/g/gm



There is a very real chance of General Motors going bust within weeks or days. 3 million wage packets. Lord knows how many credit cards and mortgages. 5,000 direct employees in the UK alone. If GM went Ford would have to follow.

If this isn't the Big One then it sure does a good impersonation.

What we tend to think of as major airlines are really just small local businesses. Nothing is too big to fail at the moment.

WWW

[Alex Whittingham]

WWW, both Dan Air and Air Europe were airlines serving the tour operator industry. One of Dan Air's weaknesses was that it wasn't tied to a tour operator, paradoxically Air Europe's weakness was that it was. It's parent company, ILG, went bust and Air Europe went down with it, even though it might have succeeded on its own. Viewed in this context both airline failures were part of the general decline of the tour operator market and the closest modern parallel is the failure of XL.

That doesn't really allow you to extrapolate their failures, which were decades ago and in a different market, into the low cost model of today any more than you could justifiably link the failure of Pan Am to the failure of Debonair.

[chickentikkamasala]

cc2180 if I was here just for my own twisted entertainment I'd ask how your CTC course was going.



www Why are you stooping this low is this really necessary from a moderator?
May we ask in what industry is Mrs Welshman making the sackings?

[chickentikkamasala]

Will Mr.Brown lead the lowering of taxes in the EU as suggested before the summer holiday bookings? Will this announcement be enough to inspire spending and get the wheels of the economy turning again?



Yes I fail to see how a proposed lowering in taxes is going to make everyone rush out and book that holiday or buy a new car all of a sudden.

[spinnaker]

Panorama (http://www.bbc.co.uk/iplayer/episode/b00fg420)

If you missed it. Gordon Brown should have been on it.

WWW.

Not just GM. VW is going to the ECB for a bailout. Basically, that means every taxpayer in the Euro zone will subsidise every VW made. :\

[Alex Whittingham]

Topslide, you don't seem to be reading these posts. I don't think anyone is saying everything is OK, the opposing view to yours is only that we don't know how this will turn out, and a bit of balance is called for. All opinions are just opinions, and as valid or invalid as the next man's no matter how well founded their owners think they are.

[no sponsor]

Surely the US Govt won't let GM & Ford go out of business?

[Dick_Dasterdly]

Yes they will, and my names not "surely"

[v6g]

I reckon Bush is hoping GM can hold out until 20th January, Obama is probably hoping the opposite.

[Wee Weasley Welshman]

Alex, I completely accept that extrapolating Dan and Air Europe onto todays situation is very flawed. Todays companies won't go bust for exactly the same reason and in exactly the same way.

What I was hoping to achieve is to get Wannabes to understand that the UK has seen recessions before and that in those recessions relatively big airlines did go bust. Much to the suprise of many of their pilots. For anyone much younger than me they wouldn't even be able to remember those times. For many wannabes the airline industry they have known has done nothing but expand and prosper at breakneck speed with a brief pause after Sept 11th.

That's why I like to harp on about Dan Air and Air Europe who were, I believe, two of the top four UK airlines by fleet size. Both bust within 12 month of one another.

Hundreds of pilots on the dole.

No jobs for wannabes for years and years.

That's the message and that's the history.

Its really a very scary industry from a job security point of view. Wannabes frequently don't understand this properly.


WWW

[no sponsor]

Anyone fancy a prestige sports car, have a look at the following auction which took place today: I quite fancy the Rolls Royce Phantom they were going for upwards of 350k 6 months ago.

Auction Report: Manheim Colchester Prestige Sale 11 Nov 08 (http://www.pistonheads.com/gassing/topic.asp?h=0&t=608485&nmt=Auction%20Report:%20Manheim%20Colchester%20Prestige%20Sa le%2011%20Nov%2008)

[Desert Budgie]

I don't agree that Dan Air and Air Europe are too much diferent than a number of companies that are vulnerable during this dark time. Most of our charter operators are still owned by companies that rely on income other than directly through the airline itself. Like I said in an earlier post, we will see the failures following the Xmas period.

The problem is it will be worse this time, as there are more vulnerable airlines. Two airlines going bust in the 90's has less of an impact than tens of airlines laying off pilots to save cash. If you catch my drift :confused:

Cheers

DB :ok:

[chrisbl]

This recession is going to be deeper and longer than the last. The first industry to go into recession is the construction industry not caused by the usual factors but by the banks cocking it up and it is looking really bad

One of the reasons the big house builders have not gone bust is that they are still the best firms to sell houses, not the banks.

The first industry to leave the recession will be construction, it all ways is and usually because governments pump money into infrastructure. This does not happen overnight and will take a couple of years.

[Re-Heat]

More grim news from the US - DHL Express (US) is pretty much closed down:

FT - "DHL's US Express business will shrink from more than 400 stations to 100, and all 18 ground hubs will shut. The air network will handle about 100,000 daily shipments compared with capacity for 1.2m today."

[Desert Budgie]

I've been following this story for the past few days. ABX Air flies around 250 aircraft for DHL. I think Astar flies another 50 odd. By closing the Ohio base which is home to ABX will cause a staggering amount of flight crew layoffs. Do the math with a MINIMUM of 4 crews per aircraft.

Although not confirmed yet, I feel we are seeing the beginnings of MAJOR pilot layoffs. Brace yourself ladies and gents!

Good luck DHL guys,

Cheers

DB :ok:

[spinnaker]

Unemployment up.

BT cut 10,000 jobs

GM on the brink

VW cap in hand to the ECB

Paulson reverses the $700b bailout. Apparently too much 'Toxic' debt ( I must check back on what I said about the global debt). Looks like the US taxpayer could be financing new car sales. :eek:

The Bank of England now says that not only is there a real prospect of undershooting the 2% inflation target but that deflation a real possibility. One prediction that I hoped, and still do, I would get wrong. Even Robert Peston is now using the 'D' word. That all a big turnaround from a month ago.

[Alex Whittingham]

What a negative spin, again.

Do you mean this VW? VW defies the economic slowdown (http://news.bbc.co.uk/1/hi/business/7699612.stm)

The FT seems to think that VW is using the ECB for liquidity only because the ECB offers 'generous conditions' not available elsewhere. Hardly 'cap in hand'. FT.com (http://www.ft.com/cms/s/0/b931d16a-af90-11dd-a4bf-000077b07658.html)

[ChrisLKKB]

Paulson reverses the $700b bailout. Apparently too much 'Toxic' debt ( I must check back on what I said about the global debt). Looks like the US taxpayer could be financing new car sales.

Don't you mean he's focused the $700bn bail out into injecting recapitalising the banks as per the Sweedish model (which Grodon Cloon has tried taking credit for) ?

This is no supprise and was already predicted. It's probably a better solution anyway and certainly better deal for tax payers.

[Alex Whittingham]

...and what did you think was going to happen to the RPI when they cut the base rate by 1.5% at a time when the price of oil was dropping so fast? It's a weighted index that gives greater emphasis to the areas where people spend a lot of money. Of course it's going to go down and, given those two big effects, why shouldn't it go negative for a short time? All it shows is that the cost of living fell. Sustained deflation is something else.

[Re-Heat]

It's a weighted index that gives greater emphasis to the areas where people spend a lot of money.
It does not re-weight every month simply based upon the basket of goods people actually purchase - it re-weights on a more periodic basis.

RPI fell through the floor as the mortgage repayment component has fallen to -2% next year; fuel is flat, but food inflation remains high.

RPI is not forecast to hit zero until the middle of next year. Going negative at all is a very serious issue - it is not the same as GDP contraction!

re TARP (US):
This is no supprise and was already predicted.
It ertainly was a surprise to everyone in the City - it is an indication of their flexibility, but is means that many of those dodgy assets have no floor price whatsoever now.

re VW:

Problem is that it is financed by shorter-term debt that is due and needs to be refinanced. Regardless of profits, it needs the cash asap to continue operations, and with the ECB handing it out (through VW's consumer credit arm) at better rates than the market, then they have taken this option.

Finally, if you take another look at today's FT - see this from Germany:

Germany’s recession is now set in black and white, confirmed by a 0.5 per cent fall in third-quarter gross domestic product. This was far worse than expected, with the real shocker being how badly exports have been hit as demand slumps worldwide. It is now fanciful to hope for any offsetting pick-up from emerging markets. Export growth, which was powering ahead strongly, could come to a complete halt next year.

[Alex Whittingham]

Absolutely, a good summary.

[JohnRayner]

EVERYTHING TO BE REALLY CHEAP BUT YOU'LL HAVE NO MONEY ANYWAY, SAY EXPERTS - The Daily Mash (http://www.thedailymash.co.uk/news/society/everything-to-be-really-cheap-but-you%27ll-have-no-money-anyway%2c-say-experts-200811131394/)



Regards all,

JR.

[Alex Whittingham]

..and, for a bit of schadenfruede re the greedy idiots that contributed to this mess Hegde funds lose £18 billion (http://news.bbc.co.uk/1/hi/business/7697082.stm)

[JohnRayner]

I used to work with a bloke surname Hegde...

:)

[Alex Whittingham]

Good spot. I'd change it, except that it would make understanding your post a little hard.....

[JohnRayner]

As opposed to my usual cogent musings...

:hmm:

[ChrisLKKB]

It ertainly was a surprise to everyone in the City - it is an indication of their flexibility, but is means that many of those dodgy assets have no floor price whatsoever now.

Very shortly after the UK bail out was released it was speculated that the US would follow suit.

If this was a supprise to everyone in the city it probably explains why we are in such deep s:mad:hit. I've been waiting for the announcement for the last few weeks.

[FlyDreamliner]

Sorry, I don't see how the financial crisis is affecting pilot job prospects.

The main reason for the crisis in the aviation sector and the failure of multiple airlines is the high fuel prices.
High fuel prices are why Skybus failed, high fuel prices are why Frontier is under Ch.11, high fuel prices are why most major US airlines cut capacity, high fuel prices are why Ryanair and Southwest will not be making profits this year, high fuel prices are why Lufthansa and Singapore's profits are down, etc...

GENEVA, Sept 3 (Reuters) - The global airline industry is set to post losses of $5.2 billion this year and $4.1 billion in 2009 as a result of oil prices, the International Air Transport Association (IATA) said on Wednesday.

Nov 3-The year 2009 will bring a dose of optimism to major U.S. airline carriers due to the effects of lower oil prices, falling domestic capacity and revenue-per-available-seat-mile growth, senior analyst Michael Derchin with FTN Midwest Securities Corp. said Monday.

There's people who have predicted this fall in oil prices in this period.

The only way the financial crisis is going to affect trainees is when they try to secure loans. The times when a pass at a selection test would guarrantee you a loan with HSBC are over.
Rightly so, there is nothing more irresponsible than to sign up on 7 year loans at over 1000 pounds a months without the prospect of a job.
Imagine you find a job straight out of school, putting aside the potential for an additional 30k for type-rating and supposing that this is an imaginary perfect world where banks don't charge you interest until you start working, if you borrow 50k and pay off 1000 pounds a month, the nice present you will offer to the bank under the beautiful name of "interests" during the first year on the job is a beautiful 7% or 3.5k, or over 2 months worth of hard work.
Year 2 that present goes down to 2.9K, still worth about 2 months of hard work. Year 3: 2.2K Year 4: 1.6K, etc...

All-in-all, in the real world, you'll end up working over a year for interests only and 3 to 4 years for your training expenses. Put that on your job application, there's no better way to prove that you are motivated!!

Bad judgement in day to day life reflects potential for bad decision making in the day to day job environment.

[AIR-SPEED]

FLYDREAMLINER

I thing you need to look out the window and see theres a recession on not just high fuel prices!

[spinnaker]

Re-Heat

Thanks for the summary.

Deflation or the threat of it, will start to be a real issue over the next 6 months or so. Falling prices will or are as a result of falling demand rather than the benefit of improved production performance. The fall in demand is primarily caused be the failure to keep increasing the money supply to power that demand. It soon becomes a spiral, wages get cut, people hold off from buying, because tomorrow whatever it is, will be cheaper, demand falls, jobs go to the wall. Who would buy a house today (unless you are desperate) when it's going to be cheaper next week. Repeat that across the whole economy. The solution is usually to cut interest rates, taxes and increase public spending, but only if that does not increase the debt. Hard to see how that would not happen.

[Re-Heat]

Sorry, I don't see how the financial crisis is affecting pilot job prospects.
The demand for cargo and passengers seats will fall - that is how it affects airlines directly. Indirectly, they cannot obtain loans, financing, and other hedging instruments that are part of the course for normal operations.

[one post only!]

Flydreamliner, pilot job prospects ARE going to be affected.

Did you read the post above about DHL?? Several airlines in Europe have gone bust recently dumping a lot of experienced guys on the market. Airlines that have recently merged laying crews off. Others stopping recruitment altogether. As pax/cargo numbers fall off (due to customer/business sentiment from the crisis), coupled with fuel bills (depending on hedging) rising airlines, are flying less. Only operating profitable flights. Therefore there is less demand for crews, those crews are working harder (900hrs), more experienced crews on the market for jobs!! How can this not affect job prospects??

Unless I have missed something I would have thought there will be a big impact on job prospects!!

[99jolegg]

Interesting article:

Darling predicts a "short, sharp shock" but strong bounce for 2010 (http://www.independent.co.uk/news/uk/politics/darling-predicts-short-sharp-shock-1015827.html)

[JohnRayner]

Yes indeed, and if it pans out that way, I for one would be very happy.

I suppose the only question is can something as large as a national economy "bounce back" so quickly in the face of what's happening right now both nationally and internationally? Has anyone else's ever done that?
(actually, I take some of that back, we are talking 18 months here, aren't we?)

The "related articles" on the left hand side of the page make for more depressing reading!

I'm still on for a WWW/ Green shoots of recovery post sweepstake. Anyone? No?

:sad:

JR