Growing evidence that the downturn is upon us....
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US regional airlines that faced serious pilot shortages a year ago have gotten a reprieve both through their own aggressive recruiting tactics and the slowing economy in the country.
The largest diversified regional operator, Republic Airways Holdings whose subsidiaries fly for six US carriers, was forced to slow its growth last year after pilot attrition levels reached 20%.
Pinnacle Airlines Corp posted an extra $1.5 million in pilot training costs during the first three months of 2007, and the carrier had to make a $1.1 million payment to partner Northwest Airlines for falling short of committed flying levels established in their air services agreement.
A year later current economic conditions in the US have mitigated that problem “naturally,” says Regional Airline Association (RAA) President Roger Cohen.
Regional carrier efforts to strengthen recruitment and legislation passed by the US Congress in late 2007 extending the pilot retirement age to 65 have also contributed to an easing of shortages, Cohen explains.
But the head of RAA also cautions that the macro factors that served as triggers for the pilot shortage – fewer individuals interested in becoming pilots and growth in operators overseas and in the corporate and fractional business – remain intact.
While Cohen characterizes the current relief as a “twenty second timeout,” those issues will again become relevant within the next five years.
The largest diversified regional operator, Republic Airways Holdings whose subsidiaries fly for six US carriers, was forced to slow its growth last year after pilot attrition levels reached 20%.
Pinnacle Airlines Corp posted an extra $1.5 million in pilot training costs during the first three months of 2007, and the carrier had to make a $1.1 million payment to partner Northwest Airlines for falling short of committed flying levels established in their air services agreement.
A year later current economic conditions in the US have mitigated that problem “naturally,” says Regional Airline Association (RAA) President Roger Cohen.
Regional carrier efforts to strengthen recruitment and legislation passed by the US Congress in late 2007 extending the pilot retirement age to 65 have also contributed to an easing of shortages, Cohen explains.
But the head of RAA also cautions that the macro factors that served as triggers for the pilot shortage – fewer individuals interested in becoming pilots and growth in operators overseas and in the corporate and fractional business – remain intact.
While Cohen characterizes the current relief as a “twenty second timeout,” those issues will again become relevant within the next five years.
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Schitzophrenic housing market
The underlying factors are completly different to the 1990s. Is it a bad thing that prices are flattening off - it isnt a crash or a slump, but it will be if idiots keep spouting about being experts and having crystal balls.
I am no economist but the underlying factors are completly different to any time before, market drop is no doubt caused almost singularly by the tightening of mortgage lending. Let things settle and maybe slump a bit.
It seems that it may become a self-fulfilling prophecy seeing as everyone seems to know the future, which in turn eventually cannot doing anything but downturn houseprices due to lack of confidence about the future.
Electrolysis of water - HHO gas hydrogen fuels are on the cusp of being turned into the fuel of the future - research it and find out more. The Hadron Collider is coming online - the future is bright and breakthroughs are being made all the time.
If you want to fly, get a PPL and enjoy yourself, do the rest later when the market has recovered is my suggestion.
House prices historically double every ten years - let things settle and find a sensible level - and lets not build anymore f****** apartments
I am no economist but the underlying factors are completly different to any time before, market drop is no doubt caused almost singularly by the tightening of mortgage lending. Let things settle and maybe slump a bit.
It seems that it may become a self-fulfilling prophecy seeing as everyone seems to know the future, which in turn eventually cannot doing anything but downturn houseprices due to lack of confidence about the future.
Electrolysis of water - HHO gas hydrogen fuels are on the cusp of being turned into the fuel of the future - research it and find out more. The Hadron Collider is coming online - the future is bright and breakthroughs are being made all the time.
If you want to fly, get a PPL and enjoy yourself, do the rest later when the market has recovered is my suggestion.
House prices historically double every ten years - let things settle and find a sensible level - and lets not build anymore f****** apartments
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Learn to fly - you can go at the weekends, touring holidays up the country, Europe? I do agree WWW that now maybe not the time to go 0 - ATPL. PPL, learn to love flying and get some valuable organic experience in, get some hours under the belt and then maybe after a 100 hours or so, then go for it if things look good, but i know it all involves the wonga.
If you cant afford a PPL and flying at weekends, dont go near an ATPL i would suggest!
If you cant afford a PPL and flying at weekends, dont go near an ATPL i would suggest!
Last edited by cirruscrystal; 8th Apr 2008 at 21:39.
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Electrolysis of water - HHO gas hydrogen fuels are on the cusp of being turned into the fuel of the future - research it and find out more. The Hadron Collider is coming online - the future is bright and breakthroughs are being made all the time.
But I may have missed something. So when can we board your HHO gas planes? What is the cost of HHO gas? What is the role of particle accelerators? What breakthroughs have been made? Whoeoe, I'm so exited!
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Hydrogen is the future
I have seen combustion engine running on it, self generated electrolysis, hydrogen production! Not rising - Hydrogen is the future
http://hydrogencommerce.com/
http://www.boeing.com/news/releases/...80403a_nr.html
http://www.intelligent-energy.com/in...econdlevel=809
http://hydrogencommerce.com/
http://www.boeing.com/news/releases/...80403a_nr.html
http://www.intelligent-energy.com/in...econdlevel=809
Last edited by cirruscrystal; 8th Apr 2008 at 20:57.
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Well.....amongst all the doom and gloom, i'll add my tuppence worth:-
On the house front - just remortgaged and valuation has risen 15% in the last 7 months.
On the job front(im a low hour fatpl) - a year of nothing and low and behold 2regional TP interviews in the last 10 days. 2 mates in a similar position, one started TR last week, the other has had 2 offers in the last 3 weeks.
Theres still plenty jobs out there just now.
On the house front - just remortgaged and valuation has risen 15% in the last 7 months.
On the job front(im a low hour fatpl) - a year of nothing and low and behold 2regional TP interviews in the last 10 days. 2 mates in a similar position, one started TR last week, the other has had 2 offers in the last 3 weeks.
Theres still plenty jobs out there just now.
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Thanks for the links, but it has been discussed before.
From the Boeing link:
"Boeing does not envision that fuel cells will ever provide primary power for large passenger airplanes"
From the Boeing link:
"Boeing does not envision that fuel cells will ever provide primary power for large passenger airplanes"
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OK WWW,
Just about every post from you of late has been problems problems problems.
Do you have some solutions for the members of this forum as to how they might progress their career choice?...or is it just gloom and doom from now on?
The half full half empty scenario stated earlier by one of our members less prone to moderator hero worship is very apt.
I think your pilot come economist roll took a bit of a dip when you started quoting from the Sun!!
Has your very own airline not just quoted a massive increase in passenger numbers?
Have not both Scotland and your homeland not just seen an Increase (all be it small) in house prices?
Yes, it bad out there for the moment, but airlines are still hireing, passenger numbers are up and predicted to increase. OK margins may well have reduced and share prices may fall, but that will not be at the expense of pilot numbers. Both Ryan and EZY continue to add routes and the Biz Jet market has never been stronger.
Let’s just temper the pessimism with a bit of positive thinking.
People will travel…they’ve got used to it! Margins will reduce, shares will fall, over priced property in the SE will find It’s true market value and….we will not go back to the horse and cart1
Are you suggesting that Wannabees just give up or do you have some wise words of advice from the 90’s which you and the industry survived?
Just about every post from you of late has been problems problems problems.
Do you have some solutions for the members of this forum as to how they might progress their career choice?...or is it just gloom and doom from now on?
The half full half empty scenario stated earlier by one of our members less prone to moderator hero worship is very apt.
I think your pilot come economist roll took a bit of a dip when you started quoting from the Sun!!
Has your very own airline not just quoted a massive increase in passenger numbers?
Have not both Scotland and your homeland not just seen an Increase (all be it small) in house prices?
Yes, it bad out there for the moment, but airlines are still hireing, passenger numbers are up and predicted to increase. OK margins may well have reduced and share prices may fall, but that will not be at the expense of pilot numbers. Both Ryan and EZY continue to add routes and the Biz Jet market has never been stronger.
Let’s just temper the pessimism with a bit of positive thinking.
People will travel…they’ve got used to it! Margins will reduce, shares will fall, over priced property in the SE will find It’s true market value and….we will not go back to the horse and cart1
Are you suggesting that Wannabees just give up or do you have some wise words of advice from the 90’s which you and the industry survived?
EZY has today closed the recruitment door and talk now is of reducing fleet size and headcount. Senior management have had their pay frozen. Hatches are being battened down.
ALL I can do is try to warn Wannabes about the storm that is approaching.
You say people will travel and they will. Maybe 90% of will travel in a recession. That leave 10% of airlines bust, hundreds of pilots out of work and all Wannabes as screwed as they were in the early 90's recession. Its really quite simple. Wannabes live and die at the margin of the industry. If the margin moves in slightly - they die.
Cirrus I am no economist but the underlying factors are completly different to any time before
You are right you are no economist. The underlying factors are exactly the same as before, namely, a rapid period of growth and lending leading to a house price bubble which stretches affordability far above the long term average. Which is where we are now with the average house costing 9 times the average income. Borrowing 5 times joint earnings means that 7% interest rates on mortgages feels just as bad as 15% interest rates did on 3.5 times single earnings in the last crash. This time the triggers may be slightly different, the underlying causes are not.
The airline industry is about to enter a major recession in Western markets. Get busy dealing with it and stop shooting the messenger.
I guess possible strategies involve training slowly, cheaply or not at all. Certainly do not rush into large debt and don't give up the day job is possible.
WWW
ALL I can do is try to warn Wannabes about the storm that is approaching.
You say people will travel and they will. Maybe 90% of will travel in a recession. That leave 10% of airlines bust, hundreds of pilots out of work and all Wannabes as screwed as they were in the early 90's recession. Its really quite simple. Wannabes live and die at the margin of the industry. If the margin moves in slightly - they die.
Cirrus I am no economist but the underlying factors are completly different to any time before
You are right you are no economist. The underlying factors are exactly the same as before, namely, a rapid period of growth and lending leading to a house price bubble which stretches affordability far above the long term average. Which is where we are now with the average house costing 9 times the average income. Borrowing 5 times joint earnings means that 7% interest rates on mortgages feels just as bad as 15% interest rates did on 3.5 times single earnings in the last crash. This time the triggers may be slightly different, the underlying causes are not.
The airline industry is about to enter a major recession in Western markets. Get busy dealing with it and stop shooting the messenger.
I guess possible strategies involve training slowly, cheaply or not at all. Certainly do not rush into large debt and don't give up the day job is possible.
WWW
Its all encapsulated here today by a source as sombre as The Economist:
The bust begins
From Economist.com
Housing-market woes spread to Britain
FOR years the housing market in Britain has defied gravity. For a few months in 2004 and 2005 house prices moderated, before taking off again. But now, finally, tighter credit and overstretched household budgets are pulling prices down.
And particularly draw your attention to:
A period of falling house prices has been long overdue and may be welcomed by those who have been priced out of the market. But past experience suggests that it is likely to inflict economic damage by slowing consumption and GDP growth. When the market slowed in 2005 household spending rose by only 1.5%, its lowest since 1992. That augurs ill for Britain’s economic prospects
The 2005 housing market SLOWDOWN damn near drove the economy half way to recession. Just 3 years later its fairly obvious where the current much much sharper deeper slump will send it.
You know how sometimes its only your best friend that will tell you a horrible truth.....
WWW
The bust begins
From Economist.com
Housing-market woes spread to Britain
FOR years the housing market in Britain has defied gravity. For a few months in 2004 and 2005 house prices moderated, before taking off again. But now, finally, tighter credit and overstretched household budgets are pulling prices down.
And particularly draw your attention to:
A period of falling house prices has been long overdue and may be welcomed by those who have been priced out of the market. But past experience suggests that it is likely to inflict economic damage by slowing consumption and GDP growth. When the market slowed in 2005 household spending rose by only 1.5%, its lowest since 1992. That augurs ill for Britain’s economic prospects
The 2005 housing market SLOWDOWN damn near drove the economy half way to recession. Just 3 years later its fairly obvious where the current much much sharper deeper slump will send it.
You know how sometimes its only your best friend that will tell you a horrible truth.....
WWW
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Get our of your bubble WWW.
Zulu time might be centered on the Greenwich meridian but the UK is far from being the center of the world.
UK traffic doesn't even account for 5% of Europe's total traffic, so even if the UK does bad, there will be plenty of jobs available throughout Europe.
Ezy stopped hiring in early February already, this is old news.
You fail to mention that Airbus has received firm orders for almost 400 new aircraft in the first quarter and Boeing almost 300. At this pace, they're in for another record-breaking year with the upcoming Farnborough air show.
As said before, let's follow the Alitalia case instead, 3000 pilot jobs are at stake, which can be compared to the number of cadets OAA and CTC together can supply in 5 years. The last report said that they have over 200 million of cash and that they can hold for a while longer waiting for the next government to come up with more reasonable options.
Zulu time might be centered on the Greenwich meridian but the UK is far from being the center of the world.
UK traffic doesn't even account for 5% of Europe's total traffic, so even if the UK does bad, there will be plenty of jobs available throughout Europe.
Ezy stopped hiring in early February already, this is old news.
You fail to mention that Airbus has received firm orders for almost 400 new aircraft in the first quarter and Boeing almost 300. At this pace, they're in for another record-breaking year with the upcoming Farnborough air show.
As said before, let's follow the Alitalia case instead, 3000 pilot jobs are at stake, which can be compared to the number of cadets OAA and CTC together can supply in 5 years. The last report said that they have over 200 million of cash and that they can hold for a while longer waiting for the next government to come up with more reasonable options.
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The Ryanair Q3 presentation from a couple of months ago makes interesting reading. Every $1 on the oil price costs €12mn from PBT... there is also an interesting matrix on slide 14 that shows the impact of rising fuel costs on profits... if yields fall just 5% and the oil price stays at the c$106-108 range even this highly profitable airline may struggle to make much by way of profit. No wonder there is a management pay freeze at the airline... wonder what it does to the P&L of other airlines once hedges roll off over the next couple of years?
It never ceases to amaze me how some people on this website fail to see the bleeding obvious when it is staring them in the face.... record high oil prices.... falling house prices.... broad based inflation... falling consumer confidence... a dramatic reduction in the availability of credit.... US possibily in recession..... recrutiment freezes at several airlines and some on the brink (Easy, Thomson fly, Alitalia, pick a US airline).... maybe it is better to turn the question round on the optimists... what is so great about the outlook for pilot recruitment?? Which of the above is incorrect? What am I missing? Just because planes have been ordered can they not be deferred or cancelled?? I also never get the arguement "oh please stop saying nasty things because by saying them it may come true".... geeez well thats a reassuring arguement... the ostrich defence... bury your head and hope it all goes away!
The outlook to me appears the most sh*t scary to me for over a generation and I would love to be persuaded otherwise! I look forward to some optimistic well researched counter arguements (i.e. besides the "I work for a flight training organisation and think you should get into serious debt to keep me actively employed" brigade.... you know who you are).
It never ceases to amaze me how some people on this website fail to see the bleeding obvious when it is staring them in the face.... record high oil prices.... falling house prices.... broad based inflation... falling consumer confidence... a dramatic reduction in the availability of credit.... US possibily in recession..... recrutiment freezes at several airlines and some on the brink (Easy, Thomson fly, Alitalia, pick a US airline).... maybe it is better to turn the question round on the optimists... what is so great about the outlook for pilot recruitment?? Which of the above is incorrect? What am I missing? Just because planes have been ordered can they not be deferred or cancelled?? I also never get the arguement "oh please stop saying nasty things because by saying them it may come true".... geeez well thats a reassuring arguement... the ostrich defence... bury your head and hope it all goes away!
The outlook to me appears the most sh*t scary to me for over a generation and I would love to be persuaded otherwise! I look forward to some optimistic well researched counter arguements (i.e. besides the "I work for a flight training organisation and think you should get into serious debt to keep me actively employed" brigade.... you know who you are).
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Oil quoted in USD and GBP is rising I agree, oil quoted in euro is rising but not at the same pace and it was lower in 2007 than in 2006.
http://www.imf.org/external/pubs/ft/.../RES115A-1.gif
If their biggest customer, the US, buys less oil, the Sheiks will have to lower the barrel price.
I know what you feel people, everytime there's a recession all the media tells everyone that it's the end of the world, the banks start to panic and to merge or go bankrupt, etc... IT'S ALWAYS THE SAME THING. EVERY SINGLE TIME THEY SAID: "THIS IS IT". Shareholders trading meanless pieces of companies to make profits on the buy/sell difference are loosing money...so what?
On 9/12 everyone believed that all airlines would go bankrupt, guess what, it didn't happen.
No matter how the economy is, try to go modular people. Why pay twice the price for the same training? Even in the healthiest economy that is crazy!!
http://www.imf.org/external/pubs/ft/.../RES115A-1.gif
If their biggest customer, the US, buys less oil, the Sheiks will have to lower the barrel price.
I know what you feel people, everytime there's a recession all the media tells everyone that it's the end of the world, the banks start to panic and to merge or go bankrupt, etc... IT'S ALWAYS THE SAME THING. EVERY SINGLE TIME THEY SAID: "THIS IS IT". Shareholders trading meanless pieces of companies to make profits on the buy/sell difference are loosing money...so what?
On 9/12 everyone believed that all airlines would go bankrupt, guess what, it didn't happen.
No matter how the economy is, try to go modular people. Why pay twice the price for the same training? Even in the healthiest economy that is crazy!!
Last edited by Nichibei Aviation; 9th Apr 2008 at 07:48.
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Shouldn't you have to pay to advertise your flight school on Pprune Nichibei??
... and here was me thinking loads of pilots got laid off post 9/11 and airline recruitment came to a grinding halt... and I thought many US carriers did go bankrupt.... but maybe I just imagined it though....
... and here was me thinking loads of pilots got laid off post 9/11 and airline recruitment came to a grinding halt... and I thought many US carriers did go bankrupt.... but maybe I just imagined it though....
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If their biggest customer, the US, buys less oil, the Sheiks will have to lower the barrel price.
You never give up do you? The Sheiks don't set the price, the markets do. US consumption was down 4% in Jan 2008 compared to Jan 2007 but Global consumption is still going up. India and China are becoming very big players, and still only 1% of the Chinese population has a private car.
I'm aware that I am talking about a small island off the coast of Eurasia (though Spain, Ireland and Netherlands are all in a house price crash and France and Italy aren't too far behind). You might concede that to the average Wannabe here the pilot market in the UK, Europe and the US is of primary interest.
EZY's news of fleet contraction and being over crewed was very much news to me yesterday. Trust me - if the lean mean orange machine is seriously tightening its belt then there will be a bloodbath as other airlines go to the wall left right and centre.
Your comments about Sept12th provide a lovely example of how timing is so critical. There were many who graduated in the year after that who failed to find a first job. A year on their IR needed renewing and they somehow found the £thousands to renew it. A further year on and the thought of throwing good money after bad after hundreds of rejection letters meant they gave up. Dreams shattered.
Your repeated attempts to talk up the market and encourage people to undertake flying training also provides a useful illustration. Just like and Estate Agent will always tell you "there has never been a better time to buy" so will anybody in flying training always spin the state of the industry. They DON'T care a jot if you get a job, just as long as you write the cheques and they can move onto the next guy, they will be happy.
I would estimate from my time as an instructor at an Integrated school that two thirds of self sponsored student were funded by mortgage equity release from their own or their parents house. With house prices dropping fast and mortgage rates and LTV's increasing sharply this source of funding will be drastically cut back. As few airlines will consider any kind of cadetship during a recession the large and small flying schools face a bleak market. I'd push for a discount. It happened in the 18 months following Sept11th. Usually in the form of nothing off the main course but freebie MCC courses to those cheeky enough to negotiate at the beginning.
Good luck,
WWW
EZY's news of fleet contraction and being over crewed was very much news to me yesterday. Trust me - if the lean mean orange machine is seriously tightening its belt then there will be a bloodbath as other airlines go to the wall left right and centre.
Your comments about Sept12th provide a lovely example of how timing is so critical. There were many who graduated in the year after that who failed to find a first job. A year on their IR needed renewing and they somehow found the £thousands to renew it. A further year on and the thought of throwing good money after bad after hundreds of rejection letters meant they gave up. Dreams shattered.
Your repeated attempts to talk up the market and encourage people to undertake flying training also provides a useful illustration. Just like and Estate Agent will always tell you "there has never been a better time to buy" so will anybody in flying training always spin the state of the industry. They DON'T care a jot if you get a job, just as long as you write the cheques and they can move onto the next guy, they will be happy.
I would estimate from my time as an instructor at an Integrated school that two thirds of self sponsored student were funded by mortgage equity release from their own or their parents house. With house prices dropping fast and mortgage rates and LTV's increasing sharply this source of funding will be drastically cut back. As few airlines will consider any kind of cadetship during a recession the large and small flying schools face a bleak market. I'd push for a discount. It happened in the 18 months following Sept11th. Usually in the form of nothing off the main course but freebie MCC courses to those cheeky enough to negotiate at the beginning.
Good luck,
WWW
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I am following this thread with interest. I would note that Oasis Hong Kong have just suspended services, which is a great shame and it is a lot that I feel personally as I knew this airline well and even was on the first fight. I am in the middle of an ATPL theory course right now. The cost of maintaining the IR rating has been mentioned several times. How expensive is this? What about maintaining a MEP rating and CPL? I ask this because I intend to follow WWW's advice by training slowly and wait it out. My basic idea is to leave the IR alone for now and take advantage of the low dollar to build hours in the USA. I would appreciate any advice as to the best strategy.
Every other IR renewal can now be done on a simulator which roughly halves the cost. However the renewal now contains all the elements of the initial IRT. Plan on maybe 8 hours in the Sim at £150 an hour plus then the test time (about one hour, no more) and the examiners fee of around £150.
Then next year doing it on the actual aircraft work on £330 an hour... gulp.
WWW
Then next year doing it on the actual aircraft work on £330 an hour... gulp.
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Thanks, WWW. What about the cost to renew a CPL or MEP, is that likely to be expensive? If I could find work as an instructor would I still have to pay to take extra training or would these just "renew themselves."