Future of the US Airline Industry

[flightknight]

Please contribute your prediction of the future of the US airline industry. What do you think it will look like in the year 2015. ?

Job cuts mount at US airlines

[BelArgUSA]

Cassandra would say...

Flightknight -
Nothing good ahead... and anyway, nothing like it was in the good old days.
xxx
I have been flying for airlines since 1969... and these were the best days in the industry. Now retiring in 3 months, and frankly, however I was an enthusiast for my pilot career, I have no regrets leaving for retirement. And having been through the worst of airline furloughs/layoff periods and airline bankruptcies from OCT 1973 through this era... I would not dream about being 25 years old and be an airline pilot again.
xxx
When interviewed and hired by PanAm in 1968, I was told that the airline would have 25 B-747s, another order for 25 would come soon, and Boeing SSTs and Concordes... and probably be captain 727 within 5 years or so... luxury cars and nice house in Malibu or Miami Biscayne Bay. It did never materialize. Starting OCT 1973, was the war that triggered OPEC start of oil blackmail. Then it became the era of de-regulation and airline bankruptcies or consolidations. I survived thanks to PanAm's assistance in recommending me for positions overseas (often horrible places) with 2 weeks at home, every 2 or 3 months or so.
xxx
The opinion of our friend Higher/Faster above is exactly what I foresee. By 2015, there will be say, two major US international airlines, shall we say AA and UA... which will have been absorbing Continental, Delta, Northwest and US Airways... SWA will continue to be a succesful domestic carrier, and will probably operate everywhere in the 50 states. There will be 2 cargo airlines left, FedEx and UPS... And who knows, maybe Air Canada, to survive, will join into the USA mega-airlines left...
xxx
I have no confidence in the future US economy. The days of the strong US$ are well over. North America will from now on deal with a strong € and compete with succesful European consolidated airlines over the Atlantic and excellent Asian carriers over the Pacific... And no need to say, GM and Ford will be history, replaced by Japanese, Korean and Chinese cars. The Chinese economy will become the largest in the world. European cars will only be luxury cars such as BMW, Mercedes and Porsches... Economy cars will come from India, and India will export their millions of well educated professionals and computer programmers and technicians.
xxx
The UAE, from Dubai and Abu Dhabi, will control much of the oil left in the world along with alliances with the Saudis and the Iranians. And sadly, Israel issues will still have to be resolved, provided they don't get nuked by their unhappy neighbors.
xxx
There was the "Rise and Fall of the Roman Empire"... now it is the turn of the former "First World" nations to exit stage left. If you ask me where I am, I am in Argentina since 15 years ago... and my retirement will be in Brazil, where my little pension will give me decent standard of living, and where a "Visa" credit card is not required for hospitalization. Keep on tuning to CNN and similar sources of info about "crime, violence and drug traffic" in South America. In the days of the Soviet Union, the Kremlin informed their people the same way as CNN does now... Yes there is some crime... exactly as in Detroit or Washington DC... I know well where to go and not to walk at night.
xxx
So, no need to say how the North American airlines will be in 2015. Many names are gone forever, others will follow, soon. I foresaw today's sad situation by the early 1990s. Pan Am chapter 7 left me with nothing after DEC 1991... Airlines in the US now charge for a bottle of water, and consider doing it for a miserable little pillow. Can you even compare AA and UA cabin service, to Lufthansa or Singapore Air...?
xxx
Do you think foreign tourists enjoy the US Immigration and TSA, and the frown of airline ticketing employees who check their second bag for $$$...? - The only reason USA still attracts foreign tourists, is shopping, thanks to favorable $$$ exchange rate.
xxx
Yes, sad outlook, call me Cassandra if you wish. Regrettable... Worse, the USA presidential elections will change nothing in Washington. It is not McCain nor Obama that will change anything (or the airline industry) - The USA is not Democrats and Republicans, it is GM and Exxon-Mobil. one completely bankrupt by their 7 liter V8 4x4 SUVs doing 10 mpg on freeways, the other filthy rich, reaping $$$ thanks to the $150/barrel of oil... That is the real face of USA 2008, with a background of foreclosures and bank failures...
xxx

Sadly, as I always sign with "Happy Contrails"

[flightknight]

Thanks for the input

Thanks BelArgUsa and H/F. I agree with you'll on my outlook for the US airline industry. Hopefully, someday we will have a one world aviation administration and the glut of pilots in the US will have more avenues.

[jai6638]

Thats a pretty good prediction BelArgUSA.. I agree with whatever you wrote.. Its time for the US to face the reality and acknowledge the rise of the Asian powers.

[GetTheFlick]

Knight,

After the Bush Presidency is done, the "Free Market"-at-all-costs era will be over. The U.S. will go back to regulation. Hopefully it will be with a lighter (and more deft) touch but the era of the Wild West market will be over. Airlines (and other industries) will go back to being less exciting and steady profits.

Oil prices will continue to be problematic but the cost of flying will reflect the real cost of flying instead of the fairy-tale prices of the last 40 years. Flying will go back to being relatively high cost where the folks that *have* to be there will pay the price.

I really see us in an era comparable to the end of the 1920's in America. They were called the "Roaring Twenties" for a reason. And the U.S. economy crashed in 1929 for those same reasons.

For all the doom-and-gloom crowd...America came back from those lows stronger than ever. Don't count it out just yet. Once we remember that it our country, our form of government and our people that make us great -- not our corporations -- we will find our way again.

Don Brown

[KAG]

Is that so simple?

the small regionals disappear

Maybe but... The regionals have a special weapon: turboprop. The Q400 for example that is really cost effective. They just have to buy it...

new combustible

Combustible definition: capable of burning.

Well I am afraid that there is no combustible left. To be simple combustible means oil.

A real change has to be done, and the humanity has to find an energy we can use for aviation... but which one?????

European cars will only be luxury cars such as BMW, Mercedes and Porsches...

yes and Renault (european) has the most important demand for ist new electric car available in 2010. So no only luxury cars in Europe...

America came back from those lows stronger than ever

Agreed! Thats not the first time America faces troubles, and America is still here. Same with Europe (2 nd world war someone?...)

But...

Asia is REALLY rising. Until up to what?? who knows.

And...

yes the world is changing, really quickly. For example it happened so fast that almost nobody noticed, but USA are not the first economy in the world anymore:

RankCountryGDP (PPP) $M
— World64,903,2631
1 European Union14,712,3692
2 United States13,843,8253
3 People's Republic of China6,991,0361


Europe became the first one last year (europe was the first one already 60 years ago, it just taking back its position after having recovered from the 2 nd world war).

Its possible that in 8 years Europe is 1, China 2, Usa 3. So yes its moving really fast.

So the USA will remain in good shape sure, but will have to understand and take into account the world, as it will just become a part of it, and not necesseraly the leading one.
The same with the aviation, the most cost effective and important spatial activity is held by Arianespace, the European rocket wich send each week sattelite around the earth folowed by the russians, and the US. No space shuttle here no hero or holywood effect. But the most important and cost effective spacial activity in the world.
Airbus... who has heard about airbus 20 years ago? And now? maybe the first civilian aviation industry in the world (or maybe second??...).

Not the best airplane for a pilot, but the same cockpit for almost all the family.... interesting.

Aviation and the world is changing fast. Now we have an oil problem. Smart will be the one who will forsee and predict the future of aviation in the US.

[boardpig]

Quite sad really

Was just reading this and have to say I agree the future does not look so good for the less competitive carriers.
How do you think this will affect the situation from a pilot perspective? I'd be interested in this as I am one of those CPL/IR guys with another career in technology who now thinks that I should stay where I am. Last year I was pretty much dead set in my determination to make the switch and did the CPL and IR to allow me to at least make a start. I think (very quickly it seems) the situation does not now look so attractive to make the switch. It seems that opportunities will dwindle as less competitive airlines fold and pilots will (as has been mentioned) be absorbed by the larger "mega" airlines. So my question is, are we looking at another situation of extended furloughs and high unemployment? Or will the new merged airlines be able to provide enough employ for those still wanting to fly for a living?

BP

[thepotato232]

It will be quite some time before the industry absorbs all of the furloughed pilots back into the fold. Capacity cuts are still coming left and right, and every day the airlines are finding new and exciting ways to run a company with as few crew members on payroll as possible. Now is certainly not the time to be making any sort of switch.

We've all been told that the industry is cyclical. What many fail to realize is that the cycle has never come back to the level it used to be - it's a downhill slope. As BelArgUSA has so sagely told us, we're a million miles away from what this career used to offer. Every time things turn bad, we end up with fewer pilots flying more hours for less money. This eventually becomes the point at which the bar is set. Only ten years ago, Southwest was regarded the bottom of the barrel in terms of a career airline choice. Now almost every pilot in the country would give anything for a job there. It's not because their contract has improved - they experienced the least decay, and they're now the gold standard for lack of competition. Many of the people getting the furlough axe this time have lost interest in coming back. Since I have my notice in hand for next month, I'm strongly considering joining the ranks of ex-airline pilots while I'm still young enough to build a new career. I still love to fly, but I doubt I'll look back wistfully on my weeks away from home, spending 16 hours a day at work and getting paid for five.

[beachbumflyer]

The future of the US airline industry?
down, down, down

[timbob]

1978: Cockpit crew of Gulfstream look at passing 747 and say "Some day......." 2008: Cockpit crew of 747 look at passing Gulfstream and say "Some day......"

[boardpig]

hmmmm

Look like its the 182 at the weekends for a long time to come then......sigh....

[galaxy flyer]

KAG

Couple of points:

First, those are Purchasing Power Parity, not real currency at current exchange rates. It would look more in US favor if not PPP.

Second, a fairer comparison is per capita numbers-American looks much better on that basis. The EU, on a per capita basis has a much lower standard of living and forget about China.

However, I agree the US is falling fast. Our infrastructure is way out-of-date, our political system is under stress and the dollar is down. Until the country makes some hard decisions, mostly on entitlement programs, taxes and a sustainable direction, it will continue a troubled path.

GF

[beachbumflyer]

Hey, the C-182 on floats is a blast

[boardpig]

True true

182 on floats? Now theres an idea... but I digress ;-)

[Roadtrip]

I predict that the US political class (Democrat or Republican, it doesn't matter) and corporate aristocracy will sell-out the American people and change the present law and allow full foreign ownership of US airlines. It will also go to open skies at least for anyone wanting to fly in the US. The corporate elite will walk off with tons of money, as will the corrupt politicians.

Decent paying jobs in the US aviation industry will go away as their paychecks are funneled effectively into the pockets of the corporate elites.

[West Coast]

If you have realistic expectations, the airline career can still be a blast. From the cockpit door forward its still pretty neat. Aft of that, not so much. As with all things, timing is an important part of the equation. Don't let all the gloom and doom stop you from entering aviation if thats your dream. My Civil aviation mentor flies at a regional and loves his job. He lives within his means, yet is still comfortable. He and his family travel, have a nice enough house and as best I can tell the bills are getting paid.

[drnetsurfer]

Right West Coast!

Sounds absolutely peachy! your friend flies for a regional and just gets his bills paid. While there are a few pilots who want to get paid enough to pay the bills, a few of us want a little more than that for the ridiculous amount crap that goes into getting in to this industry and performing for an airline and the passengers we fly around. I was flying the other day with a guy that started out as a mechanic (no knock on mechanics). He made 3-4 times more as a mechanic than he is first year at a regional and he started with about 400 hrs at my regional. Well, he is getting furloughed and our company is asking for a 6% give back along with other concessions even with a recent 5.5% inflation rate in the last 12 months. Now, I am sympathec to any who loose their jobs to furlough but his solution was that he hoped the rest of us will vote for pay concessions so that he can get back guickly and get his get his hours and maybe one day be an RJ Captain. Well that's just the problem if he really took a look at how much money and scarcifice he made to make 400 hrs happen. The debt that he and his wife had during his first year during his first year at a regional. The cost of his college education to go to most majors. The missed birthday parties, dates with your family, running thru miles of airports, the countless sims to hone his skills as a pilots.....the months away from home during one year most of which you were not being paid by the way.....I am sure this list can be lengthened. But I am so sick of guys talking about just paying their bills....not too many of us are looking for a life jet setting around the world on our own private jet and a 10 acre mansion. I would say we all love flying, that goes without saying, but this non-sense that we don't deserve more pay or to do better than just covering our bills is ridiculous. Yeah! I for one want a decent house to come home to that's a little more comfortable and a nice car and money left over to feel comfortable about even leaving the industry earlier than 65yrs. But if all you want to do is fly for free go right ahead! Many if not most us are far more capable of doing other things in industry or business. And yes! I am considering it believe me. But if airlines want talented, smart, and educated individuals flying their planes they are going to have to have to pay us for it. And no! profits by a companies aren't made with by pay concessions. My rant over!

[West Coast]

Then get out of aviation please. The faster the better.

I spent my times in the left seat of a RJ (SkyWest) so don't think others who don't share your whiner attitude don't know whats up in aviation.

[ATPMBA]

Guys getting into RJ with 400 hours TT.

I say count your blessings.

Back in the late 70's a Part 135 operation I worked for wanted and got ATP's with 3000TT, 1000ME to be a PIC on a Beechraft Barron. They had a couple of Lear Jet 24 and you needed 5000TT and be at least age 30.
And the money was not great either.

It still amazes me how those hour requirements got knocked down.

[Raas767]

Lets keep some perspective here. All we have is a snapshot in time and, I agree, right now things look really bad for U.S. aviation. Nobody knows what the future holds, however, and things can change rapidly. The only thing those of us can do, who have chosen to be in this business, is hope for the best, plan for the worse, and save as much money as possible.
Predicting doom and gloom is a waste of time and energy.

Remember the 70's?