Growing evidence that the downturn is upon us....
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I'd heard from several sources inside the airline that easyjet were taking 16 CTC cadets on to the 320 LGW fleet at the end of May. I don't know if thats the case still or not, since plans seem to be evolving almost daily in response to the price of oil.
Interesting what WWW mentions about reducing pilot numbers at EZY. I can't see people being made redundant personally, not with the number of new aircraft coming in to the fleet. AH does allude to the possibility or rather probability that recruitment is going to stop to try to control crew numbers. Even then, surely SOME recruitment will still be required this year, just on a far smaller scale?
V2
Interesting what WWW mentions about reducing pilot numbers at EZY. I can't see people being made redundant personally, not with the number of new aircraft coming in to the fleet. AH does allude to the possibility or rather probability that recruitment is going to stop to try to control crew numbers. Even then, surely SOME recruitment will still be required this year, just on a far smaller scale?
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With apologies to the FT again - just published:
EADS and Boeing
Published: May 14 2008 09:42 | Last updated: May 14 2008 15:11
At the end of a night of partying, only your real friends are still there when the bill arrives. EADS is currently popular. In its first quarter results on Wednesday, order levels at Airbus were again phenomenal. Almost 400 planes have been ordered in the first four months, continuing the record demand for aircraft seen in 2007. Together with Boeing, the plane manufactures have a order backlog equivalent to almost eight year’s worth of production.
Unfortunately, the airlines are flaky customers. Order backlogs always build up towards the end of a boom when cash is flowing. Then orders tail off, and deferrals start as airline profits suffer. There is a lag, as once work has begun on a plane, and the pre-delivery deposit paid, it makes little sense to cancel an order. But aircraft deliveries start to fall 18 months to two years after a downturn begins – typically dropping by at least 40 per cent from peak to trough.
The broader spread of customers this time offers some hope that the magnitude of any downturn will be more moderate. Asia and the Middle East account for only a quarter of the existing fleet, but around 40 per cent of orders. Low-cost start ups in the Indian market look vulnerable, but well capitalised and state backed carriers in China and the Gulf should not struggle.
Yet annual passenger growth has only been negative twice in the history of aviation – after the first Gulf war, and post September 11 2001. This has not prevented violent swings in airline profitability, or aircraft manufacturer volumes. The International Air Transport Association predicts that the airline industry will produce earnings of $4.5bn this year, but based upon an oil price of $86 per barrel – or a total fuel bill of $156bn. With crude at $126, ticket prices have to go up. If this happens at the same time as capacity is rising and global economic growth slows, more airline failures seem inevitable. The enthusiastic clamour for planes seems unlikely to last.
EADS and Boeing
Published: May 14 2008 09:42 | Last updated: May 14 2008 15:11
At the end of a night of partying, only your real friends are still there when the bill arrives. EADS is currently popular. In its first quarter results on Wednesday, order levels at Airbus were again phenomenal. Almost 400 planes have been ordered in the first four months, continuing the record demand for aircraft seen in 2007. Together with Boeing, the plane manufactures have a order backlog equivalent to almost eight year’s worth of production.
Unfortunately, the airlines are flaky customers. Order backlogs always build up towards the end of a boom when cash is flowing. Then orders tail off, and deferrals start as airline profits suffer. There is a lag, as once work has begun on a plane, and the pre-delivery deposit paid, it makes little sense to cancel an order. But aircraft deliveries start to fall 18 months to two years after a downturn begins – typically dropping by at least 40 per cent from peak to trough.
The broader spread of customers this time offers some hope that the magnitude of any downturn will be more moderate. Asia and the Middle East account for only a quarter of the existing fleet, but around 40 per cent of orders. Low-cost start ups in the Indian market look vulnerable, but well capitalised and state backed carriers in China and the Gulf should not struggle.
Yet annual passenger growth has only been negative twice in the history of aviation – after the first Gulf war, and post September 11 2001. This has not prevented violent swings in airline profitability, or aircraft manufacturer volumes. The International Air Transport Association predicts that the airline industry will produce earnings of $4.5bn this year, but based upon an oil price of $86 per barrel – or a total fuel bill of $156bn. With crude at $126, ticket prices have to go up. If this happens at the same time as capacity is rising and global economic growth slows, more airline failures seem inevitable. The enthusiastic clamour for planes seems unlikely to last.
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The most ridiculous article I have ever read.
I'd love to know the source of the article.
What a huge amount of speculation...
An amateur analyst who gives no evidence to back his claims. Are the media allowed to post such non-sense?
Here's the evidence that it's a huge lie: http://www.airbus.com/en/corporate/o...nd_deliveries/
Click O&D 1974-2007 and you'll see real facts about Airbus.
Is there a drop of deliveries 2 years after 2001? NO.
Also, I think that before posting such articles, the posters on this forum should check the facts. By fueling such articles you are giving the media a chance to forward false rumours.
One single media journalist claims that his predictions are better than airline fleet analysts at airlines worldwide who have orders for more than 12000 commercial aircraft to be delivered in the next decade.
Absolute non-sense.
I'd love to know the source of the article.
But aircraft deliveries start to fall 18 months to two years after a downturn begins – typically dropping by at least 40 per cent from peak to trough.
An amateur analyst who gives no evidence to back his claims. Are the media allowed to post such non-sense?
Here's the evidence that it's a huge lie: http://www.airbus.com/en/corporate/o...nd_deliveries/
Click O&D 1974-2007 and you'll see real facts about Airbus.
Is there a drop of deliveries 2 years after 2001? NO.
Also, I think that before posting such articles, the posters on this forum should check the facts. By fueling such articles you are giving the media a chance to forward false rumours.
One single media journalist claims that his predictions are better than airline fleet analysts at airlines worldwide who have orders for more than 12000 commercial aircraft to be delivered in the next decade.
Absolute non-sense.
PPRuNe Secret Agent!
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Brief UK overview...
Not sure TCA's shortfall of crew will be covered by a "gaggle" of CTC cadets but recruitment may be asking for type rated guys/gals again - which they will get...
People will always leave easyJet...
Don't expect TUI UK to recruit for the next few years...
As I said before, I would expect next "boom" to be 2010 more likely 2011 when certain airlines begin receiving B787's (hopefully!)
People will always leave easyJet...
Don't expect TUI UK to recruit for the next few years...
As I said before, I would expect next "boom" to be 2010 more likely 2011 when certain airlines begin receiving B787's (hopefully!)
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As I said before, I would expect next "boom" to be 2010 more likely 2011 when certain airlines begin receiving B787's (hopefully!)
Can't say for sure beyond that due to lack of data, but I suppose the A350XWB deliveries hopefully starting in 2013, the C-series and the MRJ entering service would do no bad to the industry.
I think that though all these new jets are coming to replace previous generation aircraft like the B744, B767, B757, A340, A330, Avro RJ, ERJ, etc... these aircraft will not end-up in the desert immediately but be picked up by freighters, 3rd world airlines and airlines in need of immediate growth... overall it should result in a capacity increase rather than direct replacement.
Last edited by nich-av; 14th May 2008 at 22:45.
People will always join easyJet as well... Whatever that means.
Difficult to know where to start with todays news. It really couldn't be spelled out more clearly for Wannabes. Its not just me and some crank internet sources. This is the chief economic editor of The Times, the Governor of the Bank of England and the BBC all saying "Crisis", "Recession" and "Housing Crash".
I'll admit that this is happening faster than I expected. I shudder to think what 2008 is going to look like as the secondary effects kick in. Hyperinflation, Depression or Stagflation - I can see an argument for each or none.
There is certainly the risk of a very big mess developing for Wannabes.
Whatever your exact circumstance I would suggest that there is absolutely NO pressure now to crack on with your training in any degree of haste. If a more leisurely option is also cheaper then so much the better.
WWW
Links:
http://tinyurl.com/6ggekw Daily Telegraph
Recession danger is real, warns Mervyn King
The British economy faces the real risk of falling into recession, the Governor of the Bank of England has admitted.
Mervyn King warned families to brace themselves for a further "squeeze" on household finances as rising energy bills and food prices continue to rise.
The Governor - who said that "the nice decade is behind us" - also warned homeowners that property prices would fall further and that it was impossible to predict the scale of the decline.
http://tinyurl.com/5o676o The Times, Anatole Kaletsky
..literally unprecedented in the history of modern British government, sets the stage for economic and political disaster.
http://tinyurl.com/6fgm67 The BBC
Britons on the Costa del Sol are suffering a measure of the pain which the end of the housing boom is causing across the wider Spanish economy.
Estate agents report that house prices have fallen 30% in many areas; economic growth forecasts have been revised downwards.
Unemployment is rising and predicted to reach at least 10% by the end of the year.
Difficult to know where to start with todays news. It really couldn't be spelled out more clearly for Wannabes. Its not just me and some crank internet sources. This is the chief economic editor of The Times, the Governor of the Bank of England and the BBC all saying "Crisis", "Recession" and "Housing Crash".
I'll admit that this is happening faster than I expected. I shudder to think what 2008 is going to look like as the secondary effects kick in. Hyperinflation, Depression or Stagflation - I can see an argument for each or none.
There is certainly the risk of a very big mess developing for Wannabes.
Whatever your exact circumstance I would suggest that there is absolutely NO pressure now to crack on with your training in any degree of haste. If a more leisurely option is also cheaper then so much the better.
WWW
Links:
http://tinyurl.com/6ggekw Daily Telegraph
Recession danger is real, warns Mervyn King
The British economy faces the real risk of falling into recession, the Governor of the Bank of England has admitted.
Mervyn King warned families to brace themselves for a further "squeeze" on household finances as rising energy bills and food prices continue to rise.
The Governor - who said that "the nice decade is behind us" - also warned homeowners that property prices would fall further and that it was impossible to predict the scale of the decline.
http://tinyurl.com/5o676o The Times, Anatole Kaletsky
..literally unprecedented in the history of modern British government, sets the stage for economic and political disaster.
http://tinyurl.com/6fgm67 The BBC
Britons on the Costa del Sol are suffering a measure of the pain which the end of the housing boom is causing across the wider Spanish economy.
Estate agents report that house prices have fallen 30% in many areas; economic growth forecasts have been revised downwards.
Unemployment is rising and predicted to reach at least 10% by the end of the year.
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WWW
You realy are over egging the pudding, I to listened to the Governer of the Bank of England and the message that I got was not the Hyper Mega gloom & doom that your post insists is going to happen.
The guy warned of lower house pices (hooray ! at last people can afford to buy a house and not have to starve to afford it!) rising inflation and a pressure to keep wages down.
It was his opinion that growth would slow but the UK would NOT go into recession.
I think it is time for you to turn on the ears and listen to the whole story, yes things are going to get a bit tough on the economic front but it will not be so bad that you have to start inventing new words for it!
The guy warned of lower house pices (hooray ! at last people can afford to buy a house and not have to starve to afford it!) rising inflation and a pressure to keep wages down.
It was his opinion that growth would slow but the UK would NOT go into recession.
I think it is time for you to turn on the ears and listen to the whole story, yes things are going to get a bit tough on the economic front but it will not be so bad that you have to start inventing new words for it!
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A ABN AMRO bank analyst said that oil would rise to 300$ soon.
I sincerely hope it does, there are enough technologies out there to create cleaner energy at lower price. Finally some money could be invested into research and hopefully researchers could master the nuclear fusion concept. Nuclear fusion could power jet engines safely and cleanly...the only issue is power containment.
Since fuel will no longer be needed , the aircraft could trade the fuel mass for a containment system of similar mass.
Imagine that one cup of fusion fuel could generate enough energy to keep a jumbo jet flying years without landing.
A nice article for those interested: http://www.newscientist.com/channel/...ls/dn8827.html
If oil goes to 300$, they will have no other choice.
I sincerely hope it does, there are enough technologies out there to create cleaner energy at lower price. Finally some money could be invested into research and hopefully researchers could master the nuclear fusion concept. Nuclear fusion could power jet engines safely and cleanly...the only issue is power containment.
Since fuel will no longer be needed , the aircraft could trade the fuel mass for a containment system of similar mass.
Imagine that one cup of fusion fuel could generate enough energy to keep a jumbo jet flying years without landing.
A nice article for those interested: http://www.newscientist.com/channel/...ls/dn8827.html
That's what the $13 billion ITER project is all about: By 2016, a huge magnetic containment vessel (also known as a tokamak) is to be built at a facility in France. Researchers will use that tokamak to test their concepts for sustaining a fusion reaction.
ITER's schedule calls for 20 years of research operations - leading to the construction of a prototype for a commercial fusion reactor, known as DEMO, and then actual commercialization.
Kulcinski is worried about the latter stages of the plan. Once ITER and its follow-up projects demonstrate that fusion power can be sustained and controlled inside a magnetic vessel, it's up to the parties in the project - the United States as well as China, Europe, India, Japan, Russia and South Korea - to figure out how best to get the power out.
"First you do the physics," Ned Sauthoff, the head of the U.S. ITER program, told me back in March.
"You get yourself a burning plasma. Once you've gotten a burning plasma, then it's a matter for the politicians to decide, do they want to invest in the technology?"
ITER's schedule calls for 20 years of research operations - leading to the construction of a prototype for a commercial fusion reactor, known as DEMO, and then actual commercialization.
Kulcinski is worried about the latter stages of the plan. Once ITER and its follow-up projects demonstrate that fusion power can be sustained and controlled inside a magnetic vessel, it's up to the parties in the project - the United States as well as China, Europe, India, Japan, Russia and South Korea - to figure out how best to get the power out.
"First you do the physics," Ned Sauthoff, the head of the U.S. ITER program, told me back in March.
"You get yourself a burning plasma. Once you've gotten a burning plasma, then it's a matter for the politicians to decide, do they want to invest in the technology?"
Last edited by nich-av; 15th May 2008 at 07:50.
Not sure TCA's shortfall of crew will be covered by a "gaggle" of CTC cadets but recruitment may be asking for type rated guys/gals again - which they will get...
People will always leave easyJet...
People will always leave easyJet...
Anyway, back to the thread in hand.....
WWW, Your a big grizzly and you know it!!!
A and C - when Central Bankers speak you have to interpret what they say. There is a whole industry of people out there who speak Central Banker. The general principle is that they try to make any statement as bland, as innocuous and as boring as possible. Coded phrases are used and certain words are carefully avoided. For Merv to use "the R threat is real" phrase and to say what he did in the way he did was explosive stuff for a Central Banker. I like the fellow and think he's doing a great job.
When the Governor of the BoE is saying he thinks a Recession will be avoided then in Central Banking terms he may as well have been standing on a platform with klaxons blaring, red lights flashing and a tin helmet strapped to his head.
I didn't make Stagflation up. See the wiki reference: http://en.wikipedia.org/wiki/Stagflation
Stagflation is a macroeconomics term used to describe a period of inflation combined with stagnation (that is, slow economic growth and rising unemployment), generally including recession.[1] The portmanteau term "stagflation" is generally attributed to United Kingdom Conservative MP and later Chancellor of the Exchequer Iain Macleod, who coined the term in a speech to Parliament in 1965
The article goes on to illustrate exactly where we are now. Stagflation leading to recession. I think that eventually we will see deflation as the house price asset bubble subsides by a nominal value of 20% and in real terms by about 40%.
The inflation Genie is out of the bottle around the world and the only painful cure is a deep recessionary period and unemployment. Here's a list - this is already resulting in food riots and if it continues could result in widespread civil unrest. Many of these countries are oil exporters..
Venezuela (22pc), Vietnam (21pc), Latvia (18pc), Qatar (17pc), Pakistan (17pc), Egypt (16pc) Bulgaria (15pc), The Emirates (11pc), Estonia (11pc), Turkey (9.7), Indonesia (9pc) Saudi Arabia (9.6pc), Argentina (8.9pc), Romania (8.6pc), China (8.5pc), Philippines (8.3pc), India (7.6pc).
WWW
When the Governor of the BoE is saying he thinks a Recession will be avoided then in Central Banking terms he may as well have been standing on a platform with klaxons blaring, red lights flashing and a tin helmet strapped to his head.
I didn't make Stagflation up. See the wiki reference: http://en.wikipedia.org/wiki/Stagflation
Stagflation is a macroeconomics term used to describe a period of inflation combined with stagnation (that is, slow economic growth and rising unemployment), generally including recession.[1] The portmanteau term "stagflation" is generally attributed to United Kingdom Conservative MP and later Chancellor of the Exchequer Iain Macleod, who coined the term in a speech to Parliament in 1965
The article goes on to illustrate exactly where we are now. Stagflation leading to recession. I think that eventually we will see deflation as the house price asset bubble subsides by a nominal value of 20% and in real terms by about 40%.
The inflation Genie is out of the bottle around the world and the only painful cure is a deep recessionary period and unemployment. Here's a list - this is already resulting in food riots and if it continues could result in widespread civil unrest. Many of these countries are oil exporters..
Venezuela (22pc), Vietnam (21pc), Latvia (18pc), Qatar (17pc), Pakistan (17pc), Egypt (16pc) Bulgaria (15pc), The Emirates (11pc), Estonia (11pc), Turkey (9.7), Indonesia (9pc) Saudi Arabia (9.6pc), Argentina (8.9pc), Romania (8.6pc), China (8.5pc), Philippines (8.3pc), India (7.6pc).
WWW
http://news.bbc.co.uk/1/hi/business/7404085.stm
BA sees profit soar by 45%. So its not ALL doom and gloom. :-)
WWW
BA sees profit soar by 45%. So its not ALL doom and gloom. :-)
WWW
The news rolls in relentlessly.
http://tinyurl.com/4yyass
From todays Times:
BA forced to consider £900m fall in profit
BA's profits are expected to collapse in the coming months as the sustained high price of oil pushes up its costs... This pessimistic outlook stunned investors who said it demonstrated how serious the coming downturn could be... “They are effectively admitting that profits could be zero in the worst-case scenario. There is clearly a lot of bad news to come.”... Mr Walsh told The Times: “Oil costs are going to change the industry, there is not doubt about it. A lot of airlines are going to struggle and some may be unable to cope. We have already seen failures and I think we are going to see more.”
The boss of Ryanair, easyJet and BA are now ON RECORD saying airlines are going to go bust soon. I don't know what clearer signal Wannabes could hope to receive.
There will be NO JOBS soon. Plan and spend accordingly.
WWW
http://tinyurl.com/4yyass
From todays Times:
BA forced to consider £900m fall in profit
BA's profits are expected to collapse in the coming months as the sustained high price of oil pushes up its costs... This pessimistic outlook stunned investors who said it demonstrated how serious the coming downturn could be... “They are effectively admitting that profits could be zero in the worst-case scenario. There is clearly a lot of bad news to come.”... Mr Walsh told The Times: “Oil costs are going to change the industry, there is not doubt about it. A lot of airlines are going to struggle and some may be unable to cope. We have already seen failures and I think we are going to see more.”
The boss of Ryanair, easyJet and BA are now ON RECORD saying airlines are going to go bust soon. I don't know what clearer signal Wannabes could hope to receive.
There will be NO JOBS soon. Plan and spend accordingly.
WWW
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People are really going over the top here and losing the run of themselves.Certain airlines will be worse off than others so to say something like 'there will be no jobs' is pure crap.
If recession does kick in to the effect which some people think it will then what will happen?Well firstly demand for oil will fall hence the price will stay static or fall slightly.Secondly people trade down when times are tuff,people will fly low cost such as ryanair,easy etc.Thirdly with a clear out of struggling companies that means less competition and possibly higher load factors for the stronger companies.Finally the companies with really strong balance sheets will prevail.Why?Well boeing and airbus will be forced to slash there prices if demand falls hence strong companies can get there hands on planes for cheap and in bulk hence more pilots needed.
Low cost carriers with strong balance sheets will need pilots,more expensive 'exclusive' airlines may tighten the belt and hold out on recruitment.
Thats my 2 cent worth,in my view no need for a major panic amongst people starting to train.
If recession does kick in to the effect which some people think it will then what will happen?Well firstly demand for oil will fall hence the price will stay static or fall slightly.Secondly people trade down when times are tuff,people will fly low cost such as ryanair,easy etc.Thirdly with a clear out of struggling companies that means less competition and possibly higher load factors for the stronger companies.Finally the companies with really strong balance sheets will prevail.Why?Well boeing and airbus will be forced to slash there prices if demand falls hence strong companies can get there hands on planes for cheap and in bulk hence more pilots needed.
Low cost carriers with strong balance sheets will need pilots,more expensive 'exclusive' airlines may tighten the belt and hold out on recruitment.
Thats my 2 cent worth,in my view no need for a major panic amongst people starting to train.
As a 20yr old Wannabe you frankly know Jack about this industry and your naive misplaced optimism is symptomatic of the massive complacency that is riven within Wannabeism.
There will be no jobs for no-time wannabes the day after the first UK airline goes bust.
Your touching belief that the airline industry will be saved by a recession that brings down the price of oil is extraordinary. The recession that bring the oil price down (though I don't see why it will fall far given the industrialisation of China & India) will put thousands of experienced pilots on the dole. Your 175hr log book and £60k HSBC loan will not be a great deal of use to your career as a 4 star burger flipper supervisor in the retail park McDonalds franchise.
Whilst the LoCos might pick up some pax trading down from more expensive carriers they will lose far more in discretionary sales. Given that most of the profit comes from selling tea and coffee at 37,000ft it doesn't even need people to stop flying to cripple the business model of some airlines. Bringing a flask is enough.
Be in no doubt that a recession will have the same effect as it did the last time in 1990 - 1993. For reference look up Dan Air and Air Europe to see what happens, how fast and how brutal.
WWW
There will be no jobs for no-time wannabes the day after the first UK airline goes bust.
Your touching belief that the airline industry will be saved by a recession that brings down the price of oil is extraordinary. The recession that bring the oil price down (though I don't see why it will fall far given the industrialisation of China & India) will put thousands of experienced pilots on the dole. Your 175hr log book and £60k HSBC loan will not be a great deal of use to your career as a 4 star burger flipper supervisor in the retail park McDonalds franchise.
Whilst the LoCos might pick up some pax trading down from more expensive carriers they will lose far more in discretionary sales. Given that most of the profit comes from selling tea and coffee at 37,000ft it doesn't even need people to stop flying to cripple the business model of some airlines. Bringing a flask is enough.
Be in no doubt that a recession will have the same effect as it did the last time in 1990 - 1993. For reference look up Dan Air and Air Europe to see what happens, how fast and how brutal.
WWW