Banks and loans - credit crisis?
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While it's quite likely that the peak of pilot recruiting for this cycle has been passed - and there is considerable evidence to support this - I'd be very wary of taking financial advice from pilots! Our record of economic analysis isn't the best. Not that bona fide financial analysts have a much better one, however, but most pilots' (or bus drivers' or teachers' or whomever else's) financial advice is based on gut feeling, anecdotes and insignificant statistics.
That said, here goes: the financial situation the UK and Europe finds itself in right now has few similarities with previous crises often used as circumstantial evidence for predictions of a recession/housing crash/stockmarket meltdown. While there is little doubt that confidence in and within the banking sector has taken a knock because of the lack of liquidity (ie free cash available for lending) as the major banks rein in their lending to the more risk-taking ('sub-prime') lenders, there are no signs of the wide-scale unemployment and high interest rates that have precipitated and exacerbated major national and international economic slowdowns in the past.
In the short term it will become a bit more expensive and a little more difficult to borrow money, both for corporate and individual customers. I would anticipate that, within six weeks or so, central bank interest rates in the US, UK and Europe will have eased and this will prick the bubble of interbank lending rates, with consequential easing of the consumer financial markets. Some of the less-salubrious financial institutions will undoubtedly fail - some already have - but the vast majority of the banking sector will be relatively untouched. Confidence will return, though perhaps not as quickly as some of you would like.
If you continually cry 'wolf', eventually you might be right - but no-one will believe you. I don't believe it now. That's not an excuse for irrational and reckless borrowing - you are responsible for your own financial health, and you will not be well-served by insolvency or major financial worries - but I suspect, as I have many times before, that this is a minor hiccup in a broadly very healthy economic period.
The property market discussion is not appropriate for these pages.
Scroggs
That said, here goes: the financial situation the UK and Europe finds itself in right now has few similarities with previous crises often used as circumstantial evidence for predictions of a recession/housing crash/stockmarket meltdown. While there is little doubt that confidence in and within the banking sector has taken a knock because of the lack of liquidity (ie free cash available for lending) as the major banks rein in their lending to the more risk-taking ('sub-prime') lenders, there are no signs of the wide-scale unemployment and high interest rates that have precipitated and exacerbated major national and international economic slowdowns in the past.
In the short term it will become a bit more expensive and a little more difficult to borrow money, both for corporate and individual customers. I would anticipate that, within six weeks or so, central bank interest rates in the US, UK and Europe will have eased and this will prick the bubble of interbank lending rates, with consequential easing of the consumer financial markets. Some of the less-salubrious financial institutions will undoubtedly fail - some already have - but the vast majority of the banking sector will be relatively untouched. Confidence will return, though perhaps not as quickly as some of you would like.
If you continually cry 'wolf', eventually you might be right - but no-one will believe you. I don't believe it now. That's not an excuse for irrational and reckless borrowing - you are responsible for your own financial health, and you will not be well-served by insolvency or major financial worries - but I suspect, as I have many times before, that this is a minor hiccup in a broadly very healthy economic period.
The property market discussion is not appropriate for these pages.
Scroggs
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for the gym, you can get free gym in the park.
about mobile phone, don't take any and call with prepaid call cards and use free library internet.
about car, use the bus & trains or hitchhiking.
don't eat out.
about mobile phone, don't take any and call with prepaid call cards and use free library internet.
about car, use the bus & trains or hitchhiking.
don't eat out.
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CTC also means reduced mobility, do you really want to fly the same type of aircraft, live in the same town and work for the same airline for seven years? Its a person choice. I don't believe in spending money before I recieve it unless I have too. Coming on 200 hours now and near to CPL, no flight training debt! Its been hard work, but its been the best way in my experience. I avoid debt like the plague, thats why the jewish are so rich right? I would rather do things slowly taking a year or so more than spend the rest of my life paying back intrest and debt to fuel the evil greed of the city broker. As an ex resident of the square mile I have to say that I'm really loving the current banking crisis. I think these idiots deserve everything thats coming at them, I'm also looking forward to a future decline in property prices as prices are immorally high at current with too many buy to let landlords getting greedy. I work for a company that deals with overseas stuff so I'm not loosing my job anytime soon either.
House prices in England are coming down sharply. I have several offers on houses at <88% asking price and each week one of them concedes defeat and accepts. The huge cash machine of Mortgage Equity Withdrawal has gone unserviceable and as a consequence the high street will be in full blown crisis by Christmas. There is plenty of sub prime in the UK but its called Self Certification Mortgages (Lie to Buy) and Buy To Let Mortgages.
House Price Inflation is over. And there is nobody in any capacity saying that it isn't. The debate now is between stagnation and crash.
Whichever pans out doesn't really matter because either means that the Bank Of Mum & Dad has no new capital to lend to the kids. Bookings on Integrated courses will dip I think within the next 6 months.
As ever, as I and other have said, many many times before, Timing is everything in this industry. Get it right and you might walk into a jet job a quick command and Nirvana. Get it wrong and you might never get a job, resent the industry and bitterly spend decades paying back the debt.
So think hard and try to put an old head on those young shoulders as you do so.
Cheers
WWW
House Price Inflation is over. And there is nobody in any capacity saying that it isn't. The debate now is between stagnation and crash.
Whichever pans out doesn't really matter because either means that the Bank Of Mum & Dad has no new capital to lend to the kids. Bookings on Integrated courses will dip I think within the next 6 months.
As ever, as I and other have said, many many times before, Timing is everything in this industry. Get it right and you might walk into a jet job a quick command and Nirvana. Get it wrong and you might never get a job, resent the industry and bitterly spend decades paying back the debt.
So think hard and try to put an old head on those young shoulders as you do so.
Cheers
WWW
Oh, and having lived near this red hot property market which EVERYBODY said couldn't ever go down its interesting to see my predictions from last year come true for the Dublin property market..
http://i241.photobucket.com/albums/f...o/MailIPW2.jpg
London this time next year?
Just where that would leave the airline hiring market is easy to guess
WWW
http://i241.photobucket.com/albums/f...o/MailIPW2.jpg
London this time next year?
Just where that would leave the airline hiring market is easy to guess
WWW
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Originally Posted by lovezzin
its probably a lot easier to simply join CTC. Its integrated....and they place you with an airline upon graduation, if not you are put into their hold pool for a short time.
As for placing you in a hold pool-yes they do. Don't imagine for one moment that if airlines start laying pilots off you will get a job just because you went through CTC. You could find yourself out in the cold if the worst happened and a recession were to hit the industry. You are also responsible for paying the bond: so that would be out in the cold, with no job and £60k debt!
The statement I quoted above shows something of a rose tinted view of CTC which is not justified. Nothing in aviation job markets is certain!
B
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What will happen?
Well, this an extract from some research out last week (MS, 11/09): note codes are stock or dodgy abbreviations, not the usual airline codes:
Of course, this does not directly translate to pilot recruitment - however - the effect on people's ability to finance the training, as mentioned by WWW, could be substantial.
The basis of the current problems are a number of lax lending standards in the US, which have meant that banks are not sure what other banks are holding, and therefore are overly-cautious to lend to each other. This translates to tighter lending standards for all, including in the UK and Europe, which will probably make it harder to get a loan, particularly where there is risk of not being able to repay that loan (due to there being no jobs).
Currently, I doubt this will get better for another 3-6 months from my viewpoint in the City.
matt85 - gambling winnings are tax-free: not the interest income you earn on the deposit.
Most people will take that job, than making life hard for themselves unnecessaily.
And how would that protect you? Not at all is the answer.
Well, this an extract from some research out last week (MS, 11/09): note codes are stock or dodgy abbreviations, not the usual airline codes:
We downgrade AF-KLM from O to E and on LUFT from O to U. We believe the European network airlines will face increasing revenue headwinds in 2008 — revenue trends are softening on long-haul routes relative to 2005-06, while capacity growth is increasing and business cycle demand is peaking, in our view.
Our F2008-09 forecasts now generally sit 5-10% below consensus. History shows that negative EPS revisions are very damaging to airline share price
performance.
Yield momentum is the key share price driver. Even a stable/flat yield trend in the past has not been enough. Management teams are going to be under growing pressure to drive profitability through cost-saving initiatives — we calculate that several key cost items would need to fall by at least 10% to help keep EBIT estimates at our current base-case levels.
Capacity growth and business cycle are important. As we observed with the introduction of RYA and EZJ to the short-haul market in the late 90s, industry yields collapsed almost 25% in 1995-2000 — we believe there could be a similar effect on long haul in the medium term. In addition, the incremental demand from corporates (investment banks in particular, to which airline shares are highly correlated) will at best be flat next year, in our view.
Within our Cautious sector view, we believe LCCs show a more compelling risk-reward balance. AF-KLM has delivered the most promising revenue
trends, combined with a clear path to cost reduction (€1.4 billion programme) defined through to 2010. Lufthansa has opportunities but exposure to new
long-haul entrants such as Emirates keeps us wary. BA has Terminal 5, but we believe opposing amounts of revenue risk from ‘Open Skies’ and changes to the competitive landscape at Heathrow offset this.
Our F2008-09 forecasts now generally sit 5-10% below consensus. History shows that negative EPS revisions are very damaging to airline share price
performance.
Yield momentum is the key share price driver. Even a stable/flat yield trend in the past has not been enough. Management teams are going to be under growing pressure to drive profitability through cost-saving initiatives — we calculate that several key cost items would need to fall by at least 10% to help keep EBIT estimates at our current base-case levels.
Capacity growth and business cycle are important. As we observed with the introduction of RYA and EZJ to the short-haul market in the late 90s, industry yields collapsed almost 25% in 1995-2000 — we believe there could be a similar effect on long haul in the medium term. In addition, the incremental demand from corporates (investment banks in particular, to which airline shares are highly correlated) will at best be flat next year, in our view.
Within our Cautious sector view, we believe LCCs show a more compelling risk-reward balance. AF-KLM has delivered the most promising revenue
trends, combined with a clear path to cost reduction (€1.4 billion programme) defined through to 2010. Lufthansa has opportunities but exposure to new
long-haul entrants such as Emirates keeps us wary. BA has Terminal 5, but we believe opposing amounts of revenue risk from ‘Open Skies’ and changes to the competitive landscape at Heathrow offset this.
The basis of the current problems are a number of lax lending standards in the US, which have meant that banks are not sure what other banks are holding, and therefore are overly-cautious to lend to each other. This translates to tighter lending standards for all, including in the UK and Europe, which will probably make it harder to get a loan, particularly where there is risk of not being able to repay that loan (due to there being no jobs).
Currently, I doubt this will get better for another 3-6 months from my viewpoint in the City.
matt85 - gambling winnings are tax-free: not the interest income you earn on the deposit.
CTC also means reduced mobility, do you really want to fly the same type of aircraft, live in the same town and work for the same airline for seven years? Its a person choice. I don't believe in spending money before I recieve it unless I have too.
I work for a company that deals with overseas stuff so I'm not loosing my job anytime soon either.
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And...you got a Phd....in what?....LOL
Maybe saving for 5 years to do your training would be good for you, gives you time to mature a little
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Was I the one who came on here telling people what type of school I went to and the cost to do so? You're the one telling us how good your A level results are and you're the one telling us how you went to a top 10 Uni. 
If you didn't mean LOL why did you type LOL
I am only monitoring this thread as I'd like to take in as much advise on saving the cash for training - Not to read your silly posts.
End of.
If you didn't mean LOL why did you type LOL
I am only monitoring this thread as I'd like to take in as much advise on saving the cash for training - Not to read your silly posts.
End of.
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AlphaMale has raised some good points with regards to Lovezzin's last few posts.
It most certianly isn't the viewpoint expressed but the prevailing attitude of posters. To simply throw something in someone's face and then contend that this post means nothing is neither here nor there, it's an easy cop out. Lovezzin please think before you make such throw-away comments like the above before proceeding to denigrate AlphaMale too.
There's no need for that kind of approach. Come on dude keep it above board
It most certianly isn't the viewpoint expressed but the prevailing attitude of posters. To simply throw something in someone's face and then contend that this post means nothing is neither here nor there, it's an easy cop out. Lovezzin please think before you make such throw-away comments like the above before proceeding to denigrate AlphaMale too.
There's no need for that kind of approach. Come on dude keep it above board
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Originally Posted by lovezzin
And...you got a Phd....in what?....LOL
I was 25 when I got the PhD, and the point about it is that I now have a job that will eventually pay for my training because of it. It also gave me a lot of confidence and maturity that comes in very, very useful!
Originally Posted by lovezzin
It was the way you declared your Phd in a tone of being superior
As for the 'LOL', do we really need to dissect posts in so much detail? Back to financial matters now hopefully.
B
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As Re-Heat has quoted, industry expectations are for a severe reduction in growth in revenue and profits over the next several months. Cost control is becoming the watch-word as the only way to keep everything going the right way. Expansion is (temporarily) a dirty word, and capacity increases are not wanted. Investment is difficult when there's no money to borrow, and it's likely that even the low-cost sector will be a little more cautious than usual for the next few months.
That all translates into a probably rapid contraction in pilot hiring rates for the next year or so. Note that doesn't mean it'll stop; Ryan and easy have a lot of new aircraft coming, and they can't earn money if they don't fly. Earning some money is better than earning none, so it's likely that there will be no change to delivery rates and thus hiring will continue with these airlines. They'll probably have to accept sharply reduced margins for a little while, however.
The charter, scheduled medium- and long-haul carriers are likely to have a harder time of it and will probably stop all recruiting for a while. There are no major expansive aircraft orders in place for delivery in the short-term in any case, so this isn't a major shift in policy. My own airline deferred orders and sharply slowed recruiting early this year; others have followed suit. This means that the flow of pilots from the locos to the longhaul carriers will (temporarily) stop, which will have a knock-on effect for take-up of newly-qualified pilots.
I would prepare for a quiet winter on the recruiting front.
Scroggs
PS: WWW, I appreciate you have strong views on the property market, and have been forecasting a crash seemingly ever since you left Spain, but I think you're wrong - and there are many, many differences between the Irish market (which has been in recession for a year, and has a vast over-supply of stock) and the UK one. I'd be happy to discuss it over a beer, and take a few quid on a little bet if you like!
That all translates into a probably rapid contraction in pilot hiring rates for the next year or so. Note that doesn't mean it'll stop; Ryan and easy have a lot of new aircraft coming, and they can't earn money if they don't fly. Earning some money is better than earning none, so it's likely that there will be no change to delivery rates and thus hiring will continue with these airlines. They'll probably have to accept sharply reduced margins for a little while, however.
The charter, scheduled medium- and long-haul carriers are likely to have a harder time of it and will probably stop all recruiting for a while. There are no major expansive aircraft orders in place for delivery in the short-term in any case, so this isn't a major shift in policy. My own airline deferred orders and sharply slowed recruiting early this year; others have followed suit. This means that the flow of pilots from the locos to the longhaul carriers will (temporarily) stop, which will have a knock-on effect for take-up of newly-qualified pilots.
I would prepare for a quiet winter on the recruiting front.
Scroggs
PS: WWW, I appreciate you have strong views on the property market, and have been forecasting a crash seemingly ever since you left Spain, but I think you're wrong - and there are many, many differences between the Irish market (which has been in recession for a year, and has a vast over-supply of stock) and the UK one. I'd be happy to discuss it over a beer, and take a few quid on a little bet if you like!
PPRuNe Handmaiden
Netjets Europe is still expanding. Rough estimates for next year's hiring is about 200. Cadet scheme is up and running.
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While Warren Buffet typically knows something we don't (the owner of NetJets), the main market for NetJets is the banking and financing community. Whereas others may be using NetJets to avoid the Heathrow hellhole, or get places more directly, I would not view the fact that they see are requirement and are recruiting now as a harbinger of the future...
What this discussion brings to the table is the importance of the backup plan. It doesn't matter whether it is used or not, but it makes eminent sense to try as hard as possible at school/uni to develop the best alternative career possible.
The dream just might not happen whatever your flying ability: it takes maturity to realise that.
What this discussion brings to the table is the importance of the backup plan. It doesn't matter whether it is used or not, but it makes eminent sense to try as hard as possible at school/uni to develop the best alternative career possible.
The dream just might not happen whatever your flying ability: it takes maturity to realise that.
I do have firm views on the property market but I bought as recently as 19 months ago so I've only been properly bearish since then. I've since sold and gone into rental so I have a vested interest in believing a property crash to be occurring.
Latest figures show a 70 per cent fall in the amount being borrowed from UK building societies for home loans.
They lent £656million in August 2007, versus £2,190m in August 2006...
This could be the worst news any Wannabe could receive. We may in fact be entering a 1990 scenario now. I do hope not.
Good luck,
WWW
Latest figures show a 70 per cent fall in the amount being borrowed from UK building societies for home loans.
They lent £656million in August 2007, versus £2,190m in August 2006...
This could be the worst news any Wannabe could receive. We may in fact be entering a 1990 scenario now. I do hope not.
Good luck,
WWW
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you mean 1819???
Many state banks collapse, and enormous amounts of Western real estate are foreclosed by the Bank of the United States. But there are more fundamental causes for the crisis, of which the credit collapse is only a consequence and a symptom. The swollen demand for the products of American farms and factories, resulting from scant supply of such goods at home and abroad during the war, is now satisfied: the market is declining. As prices fall, money becomes difficult to come by, but the habit of borrowing, formed in the expansive years, cannot be shaken. Those who insist on a return to specie-hard money, are seen as turning the clock back.
Many state banks collapse, and enormous amounts of Western real estate are foreclosed by the Bank of the United States. But there are more fundamental causes for the crisis, of which the credit collapse is only a consequence and a symptom. The swollen demand for the products of American farms and factories, resulting from scant supply of such goods at home and abroad during the war, is now satisfied: the market is declining. As prices fall, money becomes difficult to come by, but the habit of borrowing, formed in the expansive years, cannot be shaken. Those who insist on a return to specie-hard money, are seen as turning the clock back.
