Growing evidence that the downturn is upon us....
The House Price Crash is now indicating a full 9 on the Richter scale.
This is Dresdner Bank analysts prediction for TaylorWimpey:
We believe there is a very real danger that Britain's biggest housebuilder by volume faces collapse when covenants are tested in February
Thats a very real risk of them going bust. They asked for £500m today and the Computer Said No..
Do not put any faith in aircraft order books. Do not derive comfort from last years trading profits. Do not ignore historical fact. By the end of next year several UK airlines will be bust. Dozens of European ones. Hundreds around the globe.
The coming recession will surpass the early 1990's and resemble the 1970's recession. A winter of discontent can not be discounted given real inflation rates of 11% and public sector wage settlements of 1.9%. The mood is mutinous and one spark is all it will take.
It really is serious.
Its not different this time.
WWW
This is Dresdner Bank analysts prediction for TaylorWimpey:
We believe there is a very real danger that Britain's biggest housebuilder by volume faces collapse when covenants are tested in February
Thats a very real risk of them going bust. They asked for £500m today and the Computer Said No..
Do not put any faith in aircraft order books. Do not derive comfort from last years trading profits. Do not ignore historical fact. By the end of next year several UK airlines will be bust. Dozens of European ones. Hundreds around the globe.
The coming recession will surpass the early 1990's and resemble the 1970's recession. A winter of discontent can not be discounted given real inflation rates of 11% and public sector wage settlements of 1.9%. The mood is mutinous and one spark is all it will take.
It really is serious.
Its not different this time.
WWW
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Sound Advice
Throughout this debate WWW has given sound advice, and it's all been free. Wanabees have been given very clear guidance and need to take heed. The alternative alas is to find out the hard way and that ain't FREE !
I only wish WWW was around when I did my training in the 80's !
Good luck to you all, it's going to get nasty so take care.
I only wish WWW was around when I did my training in the 80's !
Good luck to you all, it's going to get nasty so take care.
5 years from now. We've had 12 years of really strong growth. 3 years of recession is a small price to pay. Following that contraction 2 years of stagnant growth would be normal.
Then the sector will pick up again in 2013. If we haven't run out of oil of course.
WWW
Then the sector will pick up again in 2013. If we haven't run out of oil of course.
WWW
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It is all very concerning, and anyone considering a loan without a back up plan may well find themselves hurting in the future.
What will be interesting to see is if airlines start to go under will others pick up routes/additional a/c and overall capacity remain the same or will there be a reduction in people flying.
AZ for instance are such a backward company, hands tied by unions, have to fly a/c to maintence bases that they do not fly passengers from so flying empty a/c, very old thirsty fleet. I do not think AZ have poor pax loadings on scheduled flights (maybe wrong) just awful management, I know there cargo out of UK has struggled not sure about rest their cargo world. If they went under I am sure that others will expand into the gap they left.
The most flexible, web based buisnesses with lowest overheads will fare the best, older, legacy, union driven companies will be hurting.
What will be interesting to see is if airlines start to go under will others pick up routes/additional a/c and overall capacity remain the same or will there be a reduction in people flying.
AZ for instance are such a backward company, hands tied by unions, have to fly a/c to maintence bases that they do not fly passengers from so flying empty a/c, very old thirsty fleet. I do not think AZ have poor pax loadings on scheduled flights (maybe wrong) just awful management, I know there cargo out of UK has struggled not sure about rest their cargo world. If they went under I am sure that others will expand into the gap they left.
The most flexible, web based buisnesses with lowest overheads will fare the best, older, legacy, union driven companies will be hurting.
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Out of all the airlines, I think AZ is probably the most secure. It's not going anywhere. If things do get nasty and there is a cash flow crisis - the govt will bail them out. And the EU won't do anything about it.
However, if the govt. bailed out an LCC - they would be in the sh*t - as the EU has double standards when it comes to bailouts/legalities/etc and airlines. One rule for flag carriers, and another for LCCs.
However, if the govt. bailed out an LCC - they would be in the sh*t - as the EU has double standards when it comes to bailouts/legalities/etc and airlines. One rule for flag carriers, and another for LCCs.
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Oil prices reach new record high
The price of oil has continued its surge upwards - hitting a new high of $145 a barrel in trading in Singapore.
London Brent crude rose by 74 cents to $145.00 in early Asian trade. Light sweet crude rose 81 cents to $144.38.
London Brent crude rose by 74 cents to $145.00 in early Asian trade. Light sweet crude rose 81 cents to $144.38.
BBC NEWS | Business | Oil prices reach new record high
The squeeze: key factors
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London oil price hits $146 record
The price of oil has continued to climb - with Brent crude rising above $146 a barrel for the first time.
Brent crude rose by $1.83 to $146.09 a barrel in London. US light, sweet crude rose by more than $1 to $144.81.
Brent crude rose by $1.83 to $146.09 a barrel in London. US light, sweet crude rose by more than $1 to $144.81.
Thread Starter
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This time its American Airlines cutting.... and cutting deep.... didn't realise they were "close to seeking a merger with BA" though... now that would be grim for pilot recruitment. 
American Airlines to cut 7,000 jobs - Times Online
American Airlines to cut 7,000 jobs - Times Online
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BA to seek clearance for AA and Iberia merger
British Airways is said to be close to seeking clearance from competition authorities for a three-way operational merger with American Airlines (AA) and Iberia.
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As WWW says, there is little or no comfort to be had from statistics of aircraft orders, pilot 'shortages', or past profits in a market where no-one really knows what's happening.
Oil prices have taken on a life of their own, going beyond production fundamentals and now driven by funds exiting stocks and forex for commodity futures. No-one knows how high the price of oil will go, nor how long it will stay there. The only thing likely to bring it down is evidence of significantly reduced medium-term demand. That will need to be coupled with signs of greater stability in oil producing areas, or evidence that alternative sources of fuel are significantly closer to absorbing, say, 10% of current oil demand than they are right now. Any of those factors may take another year or more to become established.
In the meantime, airlines must budget for the market they live in. As houshold and corporate budgets get squeezed by both inflationary pressures and lack of credit, the demand for air travel will naturally reduce. Increased costs will also make air travel more expensive, further reducing its attractiveness. Most American airlines are anticipating consumer demand for air travel treducing by 15 - 25% this coming winter, but have only announced capacity reductions averaging 8%. That suggests worse is to come. In Europe, opinions about how much capacity needs to be taken out is more variable, but most believe it'll be around 10 -15% overall. Whether that's by airline failures, or by a more organised capacity reduction is largely irrelevant in the context of this discussion; the net result is that by this time next year it is likely that there will be 10% fewer pilots employed in Europe than there are now. It may be more. At a rough guess, I'd say that means about 5000 qualified pilots back out in the jobs marketplace.
Now, these numbers are pure speculation, and you'd be foolish to base your plans on them, but it seems almost certain that anyone graduating between now and this time next year is likely to be in competition with type-rated and experienced pilots for the very few jobs that will exist. In similar times in the past, it's taken two to three years for all of those unemployed but relatively experienced pilots to be absorbed back into the market. Some never will be; they'll take up their own plan B, or simply retire. In the meantime, several of those who are being spat out by the schools into the cold, cold world simply will not have a hope of getting a job. Oh, there will be stories of the odd one or two who, by dint of extreme dedication, resourcefulness or just sheer luck, make it despite the odds, but the majority of those who graduate in the next year to 18 months may well find themselves having to earn their living outside a flight deck for a while.
So, if you don't have to be one of them, do something about it now, and let's hope that the economic picture doesn't turn out to be a lot worse than I paint above.
Scroggs
Oil prices have taken on a life of their own, going beyond production fundamentals and now driven by funds exiting stocks and forex for commodity futures. No-one knows how high the price of oil will go, nor how long it will stay there. The only thing likely to bring it down is evidence of significantly reduced medium-term demand. That will need to be coupled with signs of greater stability in oil producing areas, or evidence that alternative sources of fuel are significantly closer to absorbing, say, 10% of current oil demand than they are right now. Any of those factors may take another year or more to become established.
In the meantime, airlines must budget for the market they live in. As houshold and corporate budgets get squeezed by both inflationary pressures and lack of credit, the demand for air travel will naturally reduce. Increased costs will also make air travel more expensive, further reducing its attractiveness. Most American airlines are anticipating consumer demand for air travel treducing by 15 - 25% this coming winter, but have only announced capacity reductions averaging 8%. That suggests worse is to come. In Europe, opinions about how much capacity needs to be taken out is more variable, but most believe it'll be around 10 -15% overall. Whether that's by airline failures, or by a more organised capacity reduction is largely irrelevant in the context of this discussion; the net result is that by this time next year it is likely that there will be 10% fewer pilots employed in Europe than there are now. It may be more. At a rough guess, I'd say that means about 5000 qualified pilots back out in the jobs marketplace.
Now, these numbers are pure speculation, and you'd be foolish to base your plans on them, but it seems almost certain that anyone graduating between now and this time next year is likely to be in competition with type-rated and experienced pilots for the very few jobs that will exist. In similar times in the past, it's taken two to three years for all of those unemployed but relatively experienced pilots to be absorbed back into the market. Some never will be; they'll take up their own plan B, or simply retire. In the meantime, several of those who are being spat out by the schools into the cold, cold world simply will not have a hope of getting a job. Oh, there will be stories of the odd one or two who, by dint of extreme dedication, resourcefulness or just sheer luck, make it despite the odds, but the majority of those who graduate in the next year to 18 months may well find themselves having to earn their living outside a flight deck for a while.
So, if you don't have to be one of them, do something about it now, and let's hope that the economic picture doesn't turn out to be a lot worse than I paint above.
Scroggs
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It really makes very depressing reading. I'm sitting my stage 2 ATPL's next week and it doesn't help my motivation knowing that the future for newly trained pilots is so grim.
In many ways I am one of the lucky ones, in that I have a stable career as a teacher that I can always return to, and my financial risk is minimal due to getting out of the buy to let market at just the right time with some cash in hand.
but I do wonder now about where all this will lead. My aim has always been to instruct, maybe some taxi flying, after that I'm not really too bothered. I've always been safe in the knowledge that even though getting to fly "something big and shiny" is getting harder and harder, the shortage of instructors would mean that I could get a foot in the door, so to speak and knowing that I already enjoy teaching, that I would quite happily carve out a new and exciting career for myself.
Now I wonder if even that will be realistic in six months time, the combination of high oil prices, less money to spend and high unemployment among experienced pilots will make this task almost impossible I fear.
Sometimes I wonder If it's just not meant to be, this is my third, and at the age of 33, final attempt at becoming a professional pilot.
in 1992 when I got my PPL through an RAF flying scholarship, the RAF was closed for new entries and at 17 the money needed was just not available.
Again at 24 I tried after moving to Denmark, after saving for years I happily paid my savings to a training company which promptly went bust! (let that be a lesson to all those who consider paying all up front! it could happen to you!)
Third time lucky!, maybe not after all
difficult times my friends
regards D-G
In many ways I am one of the lucky ones, in that I have a stable career as a teacher that I can always return to, and my financial risk is minimal due to getting out of the buy to let market at just the right time with some cash in hand.
but I do wonder now about where all this will lead. My aim has always been to instruct, maybe some taxi flying, after that I'm not really too bothered. I've always been safe in the knowledge that even though getting to fly "something big and shiny" is getting harder and harder, the shortage of instructors would mean that I could get a foot in the door, so to speak and knowing that I already enjoy teaching, that I would quite happily carve out a new and exciting career for myself.
Now I wonder if even that will be realistic in six months time, the combination of high oil prices, less money to spend and high unemployment among experienced pilots will make this task almost impossible I fear.
Sometimes I wonder If it's just not meant to be, this is my third, and at the age of 33, final attempt at becoming a professional pilot.
in 1992 when I got my PPL through an RAF flying scholarship, the RAF was closed for new entries and at 17 the money needed was just not available.
Again at 24 I tried after moving to Denmark, after saving for years I happily paid my savings to a training company which promptly went bust! (let that be a lesson to all those who consider paying all up front! it could happen to you!)
Third time lucky!, maybe not after all
difficult times my friends
regards D-G
Last edited by Dane-Ger; 3rd Jul 2008 at 17:13.
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Asia?
With all the doom and gloom predictions about the USA and Europe, what do people think about job prospects outside these areas? Say, in Asia?
If one can afford it to do an integrated course in Oxford without going too much into debt, surely it should be possible to find a reasonably decent job in China or Singapore with those OAA credentials?
If one can afford it to do an integrated course in Oxford without going too much into debt, surely it should be possible to find a reasonably decent job in China or Singapore with those OAA credentials?
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Oil oil oil
Hence the recent chops in US aircraft fleets should make you very nervous.
The UK is in Europe, right?
Huge cuts in the US don't mean huge cuts in Europe.
Oil...
People are trading oil contracts...which means they are buying and reselling contracts that result in delivery of a certain volume of oil at a given date.
Oil is like any other business and is very similar to airline yielding systems:
Example:
Aircraft type A321 - 200 seats
Flight: LHR-GVA
Case 1: If sold at 100£ return, average load factor is 85%.
Case 2: If sold at 150£ return, average load factor is 70%.
Case 3: If sold at 200£ return, average load factor is 40%.
Case 4: If sold at 300£return, average load factor is 20%.
Oil works in the same way. The more prices increase, the lower the demand.
When oil prices go above a certain threshold, demand will decrease so strongly that those who hold oil contracts will no longer be able to sell their contracts. They will then sell these contracts in desperation at very low prices, because they need to get rid of the oil before it reaches delivery date. Otherwise, they will need to store that delivered oil and that's gonna cost them way more than their contract is worth.
When oil storages reach their peak limits, demand will decrease very strongly and that's when is going to happen.
Our airfield's fuel supplier BP said that they have plenty of fuel available in storage. Regardless of that, the reason why they're selling it at high rates is because of the market.
There's plenty of ways to restore equilibrium:
-the OPEC way that I explained before
-the suffering automobile industry comes up with viable alternatives (there's no better time to convince people!!)
-common sense in politics with removal of personal interest and corruption
-UN imposes measures in the Middle-East that are fair to all parties, restoring peace and stability.
Why Europe and Asia will not suffer as much as the US:
-Strong currency (except for the UK of course)
-Less addicted to oil, habit of coping with high gas prices (fuel efficient cars, etc...)
-More margin for adjustment (VAT, excise taxes can be reregulated)
-Fair relations with oil countries, limited support & involvement in oil wars (except for the UK of course)
Don't read the news as it is.
I couldn't stop laughing when I heard the Gazprom guy say that oil would rise to 250$ very soon.
The US is in a crisis and it is trying to take the whole world with it. The UK is willing to sacrifice for their brother from another mother.
Let's settle down and look at the traffic figures for April:
http://files.aea.be/News/PR/Pr08-019.pdf
Capacity, traffic and pax number increases in all sectors except European domestic routes (which are by the way tackled by developing railway networks).
Oil prices are going to hurt airlines' profitability and hence the ability to grow further, but in Europe we are still far from being where US airlines are.
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Greetings to all, Long time reader first time poster (and last time poster).
Despite what many on here are posting recessions are never the same they are all different! Back in the 1990's interest rates were at 15% today they are at 5% also back in 1990 the government set Interest rates and not the Bank of England.
This is just one of the differences, certainly there are also similarities but there are also crucial differences. The world is a completely different place to what it was 20 years ago and especially different from the 1970's they just about had motorways back then for Christs sake.
Now can I just say I hope this End of The Civilised Western World happens very soon and that WWW finds himself looking for a job at "Maccy D's" then maybe just maybe he will no longer be able to afford the $10 per month for the Internet and hence will no longer be in a position to keep preaching to everyone on this site.
My advice to any young wannabe is to ignore his gloomy predictions, as by his own admission he is an 'Amateur Economist' i.e. He really knows sweet fa about the economy. If you feel that you need any such advice go and speak to a professional.
The economy is obviously slowing as any intelligent person (fresh faced 18 year old or miserable old 737 captain) can see for themselves.
I await the smart arse replies from the aforementioned and his cronies. Wish I was such a miserable git. Shame the orange brigade arnt looking for 777 pilots ey 
(It will probably go something along these line....I sold my house because I knew the world was going to end so wont ever work flipping burgers I'm far to intelligent as I get told everyday..by me, myself and I)
To the rest of my professional colleagues and young wannabes, best wishes for the future..lets hope the world doesn't end by Christmas otherwise...See you at the burger bar!
Buena suerte y Adios 
Please feel free to slate me, I wont get all high and mighty about it maybe just have a good chuckle whislt I sit here in the 30 degree heat of LA.
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I'm with triple7 and mike....enough is enough!
This thread has become more about who can post alarmist news cuttings first rather than anything of use!
Nice post Scroggs... at last a moderate view from moderator!
WWW if you find yourself out of a job at EZY, .... don't apply for the diplomatic corps!
This thread has become more about who can post alarmist news cuttings first rather than anything of use!
Nice post Scroggs... at last a moderate view from moderator!
WWW if you find yourself out of a job at EZY, .... don't apply for the diplomatic corps!
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I would be inclined to agree with MIKECR!
This thread is irritating alot of folk and generating an interesting WWW fan club! Have a look around this website and there are a few other 'Oil Price' debates going on with some interesting and witty replies from 'informed' industry (Finance, Fuels and Aviation) individuals.
WWW, your 'writing style' is appaullling, you would be well advised to take some tips from your fellow moderator and more adult like writer, Scroggs. Your general "talk down, preaching, Big I Am The Original Wannabe" attitude/ego is cringe worthy...
Exit stage left...
This thread is irritating alot of folk and generating an interesting WWW fan club! Have a look around this website and there are a few other 'Oil Price' debates going on with some interesting and witty replies from 'informed' industry (Finance, Fuels and Aviation) individuals.
WWW, your 'writing style' is appaullling, you would be well advised to take some tips from your fellow moderator and more adult like writer, Scroggs. Your general "talk down, preaching, Big I Am The Original Wannabe" attitude/ego is cringe worthy...
Exit stage left...