Growing evidence that the downturn is upon us....
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This is going off-topic, but A&C's comments have irked me somewhat.
They do. Before they can purchase a ticket they have to tick a little box which says they've read the terms and conditions attached to that ticket. If your flight is cancelled and you need help (at least financially), then you'll have travel insurance to fall back on... right? 
Yes, prices are kept low by keeping costs low, which means not giving a free sandwich and drink on board. Big deal. If you don't like it, book with someone else!
Back on topic, it's a bit worrying to see the Silverjet news today, although I suspect they were always going to be one of the first to go (relatively new, relatively small customer base, obviously not much spare cash). Let's hope they can find the investment they need to get going again, although it would take someone very brave to invest in a grounded airline with oil prices rising seemingly exponentially and a recession on the horizon.
As I say at the top of the page Low cost = low service and the public needs to have that in mind when they buy a ticket.
Yes, prices are kept low by keeping costs low, which means not giving a free sandwich and drink on board. Big deal. If you don't like it, book with someone else!
Back on topic, it's a bit worrying to see the Silverjet news today, although I suspect they were always going to be one of the first to go (relatively new, relatively small customer base, obviously not much spare cash). Let's hope they can find the investment they need to get going again, although it would take someone very brave to invest in a grounded airline with oil prices rising seemingly exponentially and a recession on the horizon.
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kippaz
Look at the news today there's one............
I am a shareholder of the RBS so, yes I was talking about the rights issue
Going back to my original statement, more airlines will join forces in order to continue as a going concern
KP
I am a shareholder of the RBS so, yes I was talking about the rights issue
Going back to my original statement, more airlines will join forces in order to continue as a going concern
KP
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Silverjet, the business class-only airline, this morning admitted it no longer had the cash to continue flying and suspended operations.
The airline, which has only been in operation since last year, is the latest to fall victim to soaring jet fuel prices.
"It is with deep regret that the board of Silverjet has therefore decided that it must suspend operations with immediate effect," it said.
The last flight took off at 7.30 this morning from Luton on its way to Dubai.
Last night Silverjet said that its would-be Abu Dhabi investor Viceroy had still failed to provide it with the $5 million cash loan it had promised under a rescue deal and that it was left talking to just one potential rescue investor.
This morning it added: "Silverjet continues to be in discussions with investors interested in supporting the business, however, it has yet to conclude such discussions to its satisfaction."
The advance was required as a matter of urgency since its working capital reserves were limited. It is understood it did not have enough cash to pay for the fuel for any more flights.
A spokeswoman said she believed founding chief executive Lawrence Hunt was still talking to the investor, but agreed that the future looked bleak now the airline has no income coming in.
It employs some 330 people in Luton. Silverjet said customers who have booked flights via credit card should be able to receive money back from their credit card company or from their travel agent. But others are unlikely to get their money back.
A week ago Silverjet's shares were suspended when the airline revealed that Viceroy was not handing over the cash which it needed urgently to keep flying. At the time the airline confirmed that it remained in talks with one party which was interested in investing in the company.
The Luton-based carrier, which offers business-class flights to New York and Dubai for about one third of the price of a British Airways ticket, said last year that it was losing about £1 million a month. This figure is rumoured to have doubled in recent months. Silverjet's share price has fallen from 120p at flotation to 13½p before its stock was suspended.
The airline, which has only been in operation since last year, is the latest to fall victim to soaring jet fuel prices.
"It is with deep regret that the board of Silverjet has therefore decided that it must suspend operations with immediate effect," it said.
The last flight took off at 7.30 this morning from Luton on its way to Dubai.
Last night Silverjet said that its would-be Abu Dhabi investor Viceroy had still failed to provide it with the $5 million cash loan it had promised under a rescue deal and that it was left talking to just one potential rescue investor.
This morning it added: "Silverjet continues to be in discussions with investors interested in supporting the business, however, it has yet to conclude such discussions to its satisfaction."
The advance was required as a matter of urgency since its working capital reserves were limited. It is understood it did not have enough cash to pay for the fuel for any more flights.
A spokeswoman said she believed founding chief executive Lawrence Hunt was still talking to the investor, but agreed that the future looked bleak now the airline has no income coming in.
It employs some 330 people in Luton. Silverjet said customers who have booked flights via credit card should be able to receive money back from their credit card company or from their travel agent. But others are unlikely to get their money back.
A week ago Silverjet's shares were suspended when the airline revealed that Viceroy was not handing over the cash which it needed urgently to keep flying. At the time the airline confirmed that it remained in talks with one party which was interested in investing in the company.
The Luton-based carrier, which offers business-class flights to New York and Dubai for about one third of the price of a British Airways ticket, said last year that it was losing about £1 million a month. This figure is rumoured to have doubled in recent months. Silverjet's share price has fallen from 120p at flotation to 13½p before its stock was suspended.
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The fact of the matter is that just at the time when you need help the airline will offer you nothing. If you buy wisely you can usualy get a deal with one of the full service airlines at a price that is very near the "low cost" price and get to an airport that is not 60KM from the city that you wish to visit.
Depends who you use. A majority of easyJet, BMIBaby and Jet2 flights use 'mainline' airports.
And having to camp out on the floor of T5 for several days is what I would describe as 'no help whatsoever', not to metion the many thousands of missing bags that have yet to be found.
So low cost does not mean low service. It is freedom to choose to pay for the things you want and need. E.g. not paying for a bag if you are not checking it it, not paying for food. If you want your G+T you buy it. You also get a much better selection of food. It means an extensive route network, with regular flights. It also means not having to switch in LHR. Also - less risk of strikes - take BA - if its not the pilots, the cabin crew, check in staff and even the baggage handlers are threatening strikes. And at the slightest suggestion of trouble, the entire short haul network simply ceases to exist - they cancel EVERYTHING.
So, even if the price is not that much below the high fare airlines, LCCs do have a something more to offer besides the price of the tickets. And, it is obviously a successful idea - as the fastest growing airlines are the LCCs.
And as for weathering the storm - it was the LCCs that went from strength to strength following 9/11. But - national high fare airlines - such as Swissair and Sabena went out of business. When, at the same time, easyJet and Ryanair grew exponentially. I'm not saying they had an easy time of it (no pun intended), but they got through.
Any idoit can charge £100+ for a short domestic hop (whats left of them) on a high fare airline and make a profit, but only a wise, efficiantly run airline can charge half that and still be very profitable at the same time.
Last edited by geordiejet; 30th May 2008 at 09:59.
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Very sad news today that Old Sarum Flying Club (OSFC) has gone into receivership 
.
The real human side of this downturn comes into sharp focus when you actual know people who are directly, and painfully, affected.
I found all the front office staff and instructors a really nice bunch of professional and helpful people.
I hope they managed to get there monthly pay before it rolled over. It would also be nice to believe that a new enterprise can be created to resume the activities.
This rather sadly this could be a fortaste of more failures as the impact of fuel prices and a lack of punters with cash to splash out on indulgences.
OSFC owe me a few £100, fortunately I used a credit card, so hopefully I will see it returned. But it does serve as strong reminder about the risks of paying upfront.
.The real human side of this downturn comes into sharp focus when you actual know people who are directly, and painfully, affected.
I found all the front office staff and instructors a really nice bunch of professional and helpful people.
I hope they managed to get there monthly pay before it rolled over. It would also be nice to believe that a new enterprise can be created to resume the activities.
This rather sadly this could be a fortaste of more failures as the impact of fuel prices and a lack of punters with cash to splash out on indulgences.
OSFC owe me a few £100, fortunately I used a credit card, so hopefully I will see it returned. But it does serve as strong reminder about the risks of paying upfront.
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UK banks ‘could cope with 20% drop in prices’
http://www.ft.com/cms/s/0/ad84e560-2...077b07658.html
By Peter Thal Larsen, Banking Editor
Published: May 30 2008 02:05 | Last updated: May 30 2008 02:05
Britain’s banks and building societies could absorb a 20 per cent fall in UK house prices in a year without further denting their capital reserves, according to research by Moody’s, the credit ratings agency.
The study, to be published on Friday, comes as shares in the UK’s largest lenders continued to slide on Thursday, raising fresh concerns that the investment banks that have underwritten the rights issues for Royal Bank of Scotland and Bradford & Bingley would be left holding a substantial proportion of the new shares.
Shares in RBS slipped 2.6 per cent to 231.75p – their lowest level for a decade, and closer to the 200p price at which banks and investors have underwritten the £12bn fundraising. Meanwhile, Bradford & Bingley’s shares dropped almost 7 per cent to close at 90.5p – only 8.5p above the 82p underwriting price for its £300m rights issue.
The weak share prices reflect growing concerns about the impact of the slowing UK economy and falling house prices on banks’ profits. Investors are worried about a repeat of the housing slump of the early 1990s.
However, the Moody’s research suggests that even if house prices fall by a fifth – similar to the drop in the early 1990s and significantly more than many economists are predicting – most banks and building societies will still have sufficient capital reserves. But a 50 per cent fall in house prices would leave many banks needing fresh capital.
“We found from our stress tests that the mortgage lenders do have a considerable ability to absorb a substantial downturn in that market,” said Elisabeth Rudman, a Moody’s senior credit officer.
RBS, HBOS and B&B have launched rights issues to rebuild their balance sheets, although these capital raisings have largely been designed to boost reserves after the banks suffered losses on investments linked to the US mortgage market.
Moody’s said it could not rule out further writedowns at the UK banks until US house prices had stabilised.
The falling share prices of RBS and B&B have confounded bankers, who priced the rights issues at a heavy discount in order to increase their chances of success.
But the sell-off has also hit banks that have resisted the pressure to raise capital. Shares in Barclays on Thursday fell 9.75p to close at a five-year low of 377.5p.
Copyright The Financial Times Limited 2008
Published: May 30 2008 02:05 | Last updated: May 30 2008 02:05
Britain’s banks and building societies could absorb a 20 per cent fall in UK house prices in a year without further denting their capital reserves, according to research by Moody’s, the credit ratings agency.
The study, to be published on Friday, comes as shares in the UK’s largest lenders continued to slide on Thursday, raising fresh concerns that the investment banks that have underwritten the rights issues for Royal Bank of Scotland and Bradford & Bingley would be left holding a substantial proportion of the new shares.
Shares in RBS slipped 2.6 per cent to 231.75p – their lowest level for a decade, and closer to the 200p price at which banks and investors have underwritten the £12bn fundraising. Meanwhile, Bradford & Bingley’s shares dropped almost 7 per cent to close at 90.5p – only 8.5p above the 82p underwriting price for its £300m rights issue.
The weak share prices reflect growing concerns about the impact of the slowing UK economy and falling house prices on banks’ profits. Investors are worried about a repeat of the housing slump of the early 1990s.
However, the Moody’s research suggests that even if house prices fall by a fifth – similar to the drop in the early 1990s and significantly more than many economists are predicting – most banks and building societies will still have sufficient capital reserves. But a 50 per cent fall in house prices would leave many banks needing fresh capital.
“We found from our stress tests that the mortgage lenders do have a considerable ability to absorb a substantial downturn in that market,” said Elisabeth Rudman, a Moody’s senior credit officer.
RBS, HBOS and B&B have launched rights issues to rebuild their balance sheets, although these capital raisings have largely been designed to boost reserves after the banks suffered losses on investments linked to the US mortgage market.
Moody’s said it could not rule out further writedowns at the UK banks until US house prices had stabilised.
The falling share prices of RBS and B&B have confounded bankers, who priced the rights issues at a heavy discount in order to increase their chances of success.
But the sell-off has also hit banks that have resisted the pressure to raise capital. Shares in Barclays on Thursday fell 9.75p to close at a five-year low of 377.5p.
Copyright The Financial Times Limited 2008
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Terrible economic outlook - Time to quit?
Given the state of the world's economy, the current price of oil, peak oil theory, another airline going bankrupt every week, airlines announcing plans to reduce their fleets and layoff staff, self sponsored type ratings and "pay to play" line training programs - I ask myself if I am making a good investment and whether is it worth continuing to work hard and spend huge amounts of money on a career that is looking increasingly inviable. I love flying and there is nothing that I would rather do professionally - but there comes a point where you have to pay some attention to reality and think about whether you are just throwing money away. My flying school (the cheapest here in Madrid) has just increased its prices by 30% and so that's suddenly an extra xx thousand euros at a time when the economy is in ruins. I wonder if I am alone in thinking this way. I know a lot of people will say "never give up" but the outlook is getting bleaker each day and I don't want to spend 80,000€ on a license that I will never use (if I never find work) and costs several thousand euros each year just to renew.
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you took the words right out of my mouth.
I'm now seriously considering finishing groundschool and then going back to my old job for a year and reassessing the situation then. Am i correct in thinking that you have 3 years grace after completing ATPL theory to get your CPL/IR before having to re-take the 14 exams??
I'm very sad that it's come to this but I think it's the only financially sensible option, unless anyone has a better idea, a job, or a magic wand????
I'm now seriously considering finishing groundschool and then going back to my old job for a year and reassessing the situation then. Am i correct in thinking that you have 3 years grace after completing ATPL theory to get your CPL/IR before having to re-take the 14 exams??
I'm very sad that it's come to this but I think it's the only financially sensible option, unless anyone has a better idea, a job, or a magic wand????
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I dont think anyone can really be any more useful than just saying "its up to you".
Cause really it is. We know the economic outlook and we can see what is likely to happen. I am going to be investing in it but thats the choice that i have made. Maybe it will turn out to be a stupid risk that should not have been taken, and maybe it will work out for me.
Cause really it is. We know the economic outlook and we can see what is likely to happen. I am going to be investing in it but thats the choice that i have made. Maybe it will turn out to be a stupid risk that should not have been taken, and maybe it will work out for me.
If you are deep into training right now (CPL or IR phase etc) then you've probably timed it to be just wrong. There won't be any jobs in a few months time. If you are earlier in the training plan such as hours building or groundschool then its probably wise to slow everything right down and think about alternative work for a year or two and pay off debt.
Timing is everything in this industry.
WWW
Timing is everything in this industry.
WWW
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well, in six days i'll be finished with groundschool. The original plan was to go abroad and work until end of september, after which time i'll have enough cash for the hours build, cpl/IR and mcc, but not a type rating, then hours build in october in the states, then CPL/IR blah blah starting mid november.
The plan now maybe to still do the hours build as the euro/dollar rate is still at just about record highs, but then sit tight and perhaps work some more and at least save enough for a debt free instructor rating on top what i've got should the economics turn out as bad as we fear. At least that way i'll have no debt (but no money either!!) when i've finished the flight training and if it's instructing for a year or two at least i'll be build hours and getting paid for it and improving my chances when the upturn starts.
Obviously I'd much rather go straight to the airlines but as thats looking increasingly unlikely I'm looking to hedge my bets somewhat.
sensible??? or wimpy?
The plan now maybe to still do the hours build as the euro/dollar rate is still at just about record highs, but then sit tight and perhaps work some more and at least save enough for a debt free instructor rating on top what i've got should the economics turn out as bad as we fear. At least that way i'll have no debt (but no money either!!) when i've finished the flight training and if it's instructing for a year or two at least i'll be build hours and getting paid for it and improving my chances when the upturn starts.
Obviously I'd much rather go straight to the airlines but as thats looking increasingly unlikely I'm looking to hedge my bets somewhat.
sensible??? or wimpy?
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Regarding expiry of the theory exams, I have just checked and you have 36 months from the date of your first pass or partial pass to obtain the CPL and IR. I am taking the exams myself next week. I am still going to do hours in the US this summer as I have already bought the plane ticket and the dollar rate is very low, but then I think I might wait and see before continuing further. I am not planning on getting into debt and I think that at the moment I might go as far as CPL, FI but obviously that depends if flight schools continue to have vacancies. At the moment I think there are a reasonable amount of job opportunities for instructors, but I am concerned that that might change if people stop moving up the ladder and less people decide to learn to fly given the combination of the negative economic outlook and rising prices. Personally if I was having to borrow money I would stop right now. I can justify spending a certain money on this "hobby" of mine if it ends up being just that, but each step is more expensive and less useful than the one before if you don't end up with a job (higher grades of licenses expire more quickly, cost more to renew etc).
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WWW Please when you say there will not be any jobs please refer to Uk i happen to hold two nationalities one happens to be kenya,there are very many jobs going albeit for citizens,jobs on offer anything from brand new ATRs to 737 800 with ratings fully paid by the airline and salary from day one.
you are a Mod please know pprune is used by people from world over,the fact that things will be tough in the UK does not mean its world over,you keep on quoting stuff that apply to UK,the world is bigger than the Uk
you are a Mod please know pprune is used by people from world over,the fact that things will be tough in the UK does not mean its world over,you keep on quoting stuff that apply to UK,the world is bigger than the Uk
That is a very fair criticism. I do write to an audience that I perceive as being in their 20's and British without a Trust Fund. Whereas this forum has a much broader audience.
I have tried to mention that the BRIC nations will be booming and that in terms of global contracting jobs there has never been a better time to be a pilot. I could take any one of a dozen well paid jobs around the globe tomorrow if I chose to do so. There really is a pilot shortage in India and the likes.
A quick reality check shows that at least three quarters of Wannabes on these forums are young and European. Half are British.
I take your point though. Wannabe Patel should be borrowing the Farm and getting their training done ASAP. For him these are the Hamble years. Which is the root of the problem we face in the West..
WWW
I have tried to mention that the BRIC nations will be booming and that in terms of global contracting jobs there has never been a better time to be a pilot. I could take any one of a dozen well paid jobs around the globe tomorrow if I chose to do so. There really is a pilot shortage in India and the likes.
A quick reality check shows that at least three quarters of Wannabes on these forums are young and European. Half are British.
I take your point though. Wannabe Patel should be borrowing the Farm and getting their training done ASAP. For him these are the Hamble years. Which is the root of the problem we face in the West..
WWW
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WWW,
Sorry, I dont really understand your statement - care to explain?
"Wannabe Patel should be borrowing the Farm and getting their training done ASAP. For him these are the Hamble years. Which is the root of the problem we face in the West.."
Sorry, I dont really understand your statement - care to explain?
"Wannabe Patel should be borrowing the Farm and getting their training done ASAP. For him these are the Hamble years. Which is the root of the problem we face in the West.."
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What if the airline industry never rises again after this fall?
Oil is getting more expensive and maybe running out?
In 4 years, the barrel might cost $400? How the hell will it be possible to lift the airline industry?
Eikido
Oil is getting more expensive and maybe running out?
In 4 years, the barrel might cost $400? How the hell will it be possible to lift the airline industry?
Eikido
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I agree with WWW
. Right now I'm scalling back on the spending towards flying. Working in a car factory - dull as anything - but I'd rather be earning a decent wage than spending on flight training. The IR is about to expire, but I'm going down the instructor route, so not too bothered about that at this time. And I'm so skint after my CPL/FIC course, that I just don't have the funds to begin completing it for another few months.
When my CPL eventually comes back from the CAA - Im hoping to finish my FIC and teach at weekends. And once the storm clouds have passed, I might move in to teaching full time. It's taken me 3 years to get the CPL/IR - and now there are no jobs - typical of my luck! But what can you do? Well, spending many more thousands on flying is not something I'm prepared to do
. A little by little, but I'm not maxing out any more credit cards, or taking out any more loans.
No doubt there will be some people getting jobs, but, I would rather spend £70k on lottery tickets given the current circumstances. I think this is going be a very harsh Winter this year, and I really do think WWW tells it like it is. It's not what you want to hear - but it's what you need to hear!
The outlook is bleak (well, unless you are an FTO salesperson), and the signs are all around - even real life pilots on other threads have said things don't look too rosy. And in the past 24 hours, both Silverjet and Old Sarum are no more. There are talk of one or two British airlines going bust this Summer (but nobody has named them - so I've no idea who they are).
These are tough times, a lot different to when I began flight training.
. Right now I'm scalling back on the spending towards flying. Working in a car factory - dull as anything - but I'd rather be earning a decent wage than spending on flight training. The IR is about to expire, but I'm going down the instructor route, so not too bothered about that at this time. And I'm so skint after my CPL/FIC course, that I just don't have the funds to begin completing it for another few months. When my CPL eventually comes back from the CAA - Im hoping to finish my FIC and teach at weekends. And once the storm clouds have passed, I might move in to teaching full time. It's taken me 3 years to get the CPL/IR - and now there are no jobs - typical of my luck! But what can you do? Well, spending many more thousands on flying is not something I'm prepared to do
. A little by little, but I'm not maxing out any more credit cards, or taking out any more loans.No doubt there will be some people getting jobs, but, I would rather spend £70k on lottery tickets given the current circumstances. I think this is going be a very harsh Winter this year, and I really do think WWW tells it like it is. It's not what you want to hear - but it's what you need to hear!
The outlook is bleak (well, unless you are an FTO salesperson), and the signs are all around - even real life pilots on other threads have said things don't look too rosy. And in the past 24 hours, both Silverjet and Old Sarum are no more. There are talk of one or two British airlines going bust this Summer (but nobody has named them - so I've no idea who they are).
These are tough times, a lot different to when I began flight training.
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Peterinmadrid - mate, a pass in the ATPL theoretical exams will be accepted for the issue of a CPL or IR during the 36 months from the end of the month of the date of the FINAL pass of the examinations.