Growing evidence that the downturn is upon us....
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Zoom gone bust today... another one bites the dust.
Easy, Ryanair and BA recruitment freezes.... Flybe will not be far behind. All those who have been slagging off WWW how do you like you humble pie served??
And it is only going to get worse over the next 6 months... Over half of OAT's cadets have gone to either BA or Ryanair for last 3 years... with those doors now shut good luck on those integrated courses!
Easy, Ryanair and BA recruitment freezes.... Flybe will not be far behind. All those who have been slagging off WWW how do you like you humble pie served??
And it is only going to get worse over the next 6 months... Over half of OAT's cadets have gone to either BA or Ryanair for last 3 years... with those doors now shut good luck on those integrated courses!
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What recession??
All those who have been slagging off WWW how do you like you humble pie served??
I got news for him:
The government estimated on Thursday that U.S. gross domestic product grew at a 3.3 percent annual rate in the second quarter, well above an initial estimate of 1.9 percent rate and above economists' expectations of a 2.7 percent rate.
The number squashed any speculation that the economy was mired in recession, or negative growth.
The number squashed any speculation that the economy was mired in recession, or negative growth.
The energy crisis is slowly coming to an end as investors regain common sense and reinvest in traditional markets. Oil prices have no more reason to rise at this point, and I hope that the valutation of oil will decrease to 90$/barrel by year-end.
I still stand by my previous comment that United will go down before the oil markets recover and that the huge pilot shortage we are facing around 2010 will hit many regional and bizjet operators to a point where some will have to ground aircraft.
The wide and wild speculation that is coming to its end was but an instant of relief...
As I have said several times before - Oil prices are the sideshow, the real issue is the recession. And don't try to pin a prediction of $200 oil on me as I never said that nor suggested it.
I don't need to put the bear case any more. When I started doing so in the summer of last year hardly anyone thought a house price crash was going to happen and that a recession was a laughable likelihood. Now that both these events have come to pass and the mass media have caught on to the fact the bear facts are printed every day for all to see.
My predicition of airlines going bust is coming true (Zoom yesterday) and there will be plenty more.
Make your training choices as you see fit. You wanna keep renewing your licences, exams and ratings year after year then thanks, my ex-colleagues still in the flying training business will be very grateful.
WWW
ps A&C - was it you who said I'd be desperately trying to get back on the housing ladder having Sold To Rent in 2007? Looks more like a firemans pole to me...
I don't need to put the bear case any more. When I started doing so in the summer of last year hardly anyone thought a house price crash was going to happen and that a recession was a laughable likelihood. Now that both these events have come to pass and the mass media have caught on to the fact the bear facts are printed every day for all to see.
My predicition of airlines going bust is coming true (Zoom yesterday) and there will be plenty more.
Make your training choices as you see fit. You wanna keep renewing your licences, exams and ratings year after year then thanks, my ex-colleagues still in the flying training business will be very grateful.
WWW
ps A&C - was it you who said I'd be desperately trying to get back on the housing ladder having Sold To Rent in 2007? Looks more like a firemans pole to me...
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I guess I just find it kind of funny that the UK is in such a sorry state after a long economic boom. We are currently going into a recession with sky high taxes, no money in the bank and up to our ears in debt.
It is bit like a farmer deciding to milk his cow twice as much and also to stop feeding it. When it drops down dead (to his surprise) he borrows the neighbor's cow and does it all over again.
What other airlines are in trouble out there? Any ideas??
It is bit like a farmer deciding to milk his cow twice as much and also to stop feeding it. When it drops down dead (to his surprise) he borrows the neighbor's cow and does it all over again.
What other airlines are in trouble out there? Any ideas??
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More metaphors...
The economic rollercoster has just come to the top of it's biggest upswing to date, it's pausing there for a brief moment.... Who knows how fast and low it will go?
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..or it is a bit like trading airspeed for altitude to achieve a better climb rate. Everyone on board gets excited by the new and improved climb rate, but nobody sees that the speed is bleeding off. As we approach the stall we are forced to pitch down again. As we plummet towards earth we look at each other wondering what went wrong. Surely, nobody could have predicted this one?!?
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Originally Posted by Brainstorm
Surely, nobody could have predicted this one?!?
I've no doubt the government knew well in advance it was going to happen, I'm sure it was a factor in Blair handing over the reigns when he did. Governments don't talk about recessions though if they can avoid it, maybe through denial but more likely because they can talk the country into recession by scaremongering.
Air travel is one thing that is going to be hit hard by a recession particularly with high oil prices. With less money around and often non existent pay rises, luxuries like holidays abroad and air travel in general are going to take a hit. This time round though (according to R2),with people now viewing holidays not as a luxury but as a necessity, this suggests to me that the airlines are going to suffer a slow protracted down turn so the signs may not be immediately obvious.
As with everything though, these things are cyclical, I realise that we are living in the era of I want it now, I will have it now but on mass it's the people who are patient and bide their time and time qualifying to coincide with the start of the next up turn who will be best off. Know one is saying it's all over and recruiting is going to dry up all together but wouldn't you be rather competeing in a market where there are a few hundred jobs rather than a few dozen?
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From the Telegraph:
Rising fuel costs send Aer Lingus plummeting
Irish carrier Aer Lingus has flagged "fundamental changes" to its cost base after plunging into the red in a move that analysts say paves the way for a radical staffing overhaul.
The airline, formerly majority owned by the Irish government, revealed yesterday that soaring fuel costs were behind a €20.2m (£16.3m) first-half loss and warned that the deficit could worsen next year.
Rising fuel costs send Aer Lingus plummeting - Telegraph
Also
Concerns for Spanish banks after downgrade on mortgage securities
Fitch Ratings has downgraded six sets of Spanish mortgage securities issued by Banco Santander, heightening concerns that the damage from Spain's property crash is spreading to the country's strongest lenders.
The loans were "sliced and diced" and packaged in an identical way to sub-prime mortgage bonds in the US, belying claims by the Spanish government that the country had avoided the sort of lending practices seen in Anglo-Saxon economies.
The cluster of residential property securities, worth €4.06bn (£3.27bn), were all based on mortgages that exceeded 80pc of the house value, and many were 95pc or even 100pc. They were all issued in 2007 at the height of the property boom. Fitch downgraded the lower tier A, BBB, and BB tranches of the securities.
Concerns for Spanish banks after downgrade on mortgage securities - Telegraph
The Irish and the Spanish are both seeing house price crashes a little deeper and a little ahead of the UK one. Their airlines are in trouble. It is getting worse there and worse in the UK. The scandanvians are in trouble (SAS is bleeding money profusely) the Italians are just about to bankrupt Alitalia, the German economy is shrinking, Estonian and Latvian fiscal system is about to implode and Holland and Denmark are in recession with house price crashes.
Do we really think that no UK airline will go under this winter? When that happens we Wannabes are going to be at the back of a long queue I reckon.
Whilst The Sun has...
House price fall fastest for 18yrs | The Sun |News|Sun Money
HOUSE prices are falling at the fastest rate for 18 years, it was revealed yesterday.
They tumbled another 1.9 per cent this month.
And that took the annual rate of decline to 10.5 per cent — not seen since the 1990 property crash.
Over at the Guardian they have...
House price plunge fuels recession fear | Business | The Guardian
House price plunge fuels recession fear
Warning that two million may be out of work by Christmas
Fears of recession this winter intensified yesterday after the CBI reported the weakest high street activity in 25 years, the Nationwide building society said house prices were falling at £150 a day and a Bank of England policymaker warned of two million unemployed by Christmas.
When the Sun and the Guardian are both telling you its a crash and a recession then I think its pretty much happened. As WWW has pointed out - you need to learn about the last time this happened in 1991 if you want to understand the present. Those that refuse to learn from history are doomed to repeat its mistakes and all that jazz.
Lets start a book on which UK airline will cease trading first..
Converted.
Rising fuel costs send Aer Lingus plummeting
Irish carrier Aer Lingus has flagged "fundamental changes" to its cost base after plunging into the red in a move that analysts say paves the way for a radical staffing overhaul.
The airline, formerly majority owned by the Irish government, revealed yesterday that soaring fuel costs were behind a €20.2m (£16.3m) first-half loss and warned that the deficit could worsen next year.
Rising fuel costs send Aer Lingus plummeting - Telegraph
Also
Concerns for Spanish banks after downgrade on mortgage securities
Fitch Ratings has downgraded six sets of Spanish mortgage securities issued by Banco Santander, heightening concerns that the damage from Spain's property crash is spreading to the country's strongest lenders.
The loans were "sliced and diced" and packaged in an identical way to sub-prime mortgage bonds in the US, belying claims by the Spanish government that the country had avoided the sort of lending practices seen in Anglo-Saxon economies.
The cluster of residential property securities, worth €4.06bn (£3.27bn), were all based on mortgages that exceeded 80pc of the house value, and many were 95pc or even 100pc. They were all issued in 2007 at the height of the property boom. Fitch downgraded the lower tier A, BBB, and BB tranches of the securities.
Concerns for Spanish banks after downgrade on mortgage securities - Telegraph
The Irish and the Spanish are both seeing house price crashes a little deeper and a little ahead of the UK one. Their airlines are in trouble. It is getting worse there and worse in the UK. The scandanvians are in trouble (SAS is bleeding money profusely) the Italians are just about to bankrupt Alitalia, the German economy is shrinking, Estonian and Latvian fiscal system is about to implode and Holland and Denmark are in recession with house price crashes.
Do we really think that no UK airline will go under this winter? When that happens we Wannabes are going to be at the back of a long queue I reckon.
Whilst The Sun has...
House price fall fastest for 18yrs | The Sun |News|Sun Money
HOUSE prices are falling at the fastest rate for 18 years, it was revealed yesterday.
They tumbled another 1.9 per cent this month.
And that took the annual rate of decline to 10.5 per cent — not seen since the 1990 property crash.
Over at the Guardian they have...
House price plunge fuels recession fear | Business | The Guardian
House price plunge fuels recession fear
Warning that two million may be out of work by Christmas
Fears of recession this winter intensified yesterday after the CBI reported the weakest high street activity in 25 years, the Nationwide building society said house prices were falling at £150 a day and a Bank of England policymaker warned of two million unemployed by Christmas.
When the Sun and the Guardian are both telling you its a crash and a recession then I think its pretty much happened. As WWW has pointed out - you need to learn about the last time this happened in 1991 if you want to understand the present. Those that refuse to learn from history are doomed to repeat its mistakes and all that jazz.
Lets start a book on which UK airline will cease trading first..
Converted.
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I know what ironic means...
It means "pertaining to iron"..
Apologies. The weekend comes, and I can smell the beer.
JR
Apologies. The weekend comes, and I can smell the beer.
JR
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Originally Posted by Brainstorm
Chris, I was being ironic!
What ever anyone thinks is going to happen, one source of high passenger numbers is definately drying up, (allegedly) and that's imigration. This article takes a realistic view on the situation The End Of Aviation It makes very good reading (all four pages).
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btw i'm not so sure a crash in house prices will have such a profound effect on aviation. Obviously property speculators will be hit in the short term and people who have over stretched themselves to buy houses at over inflated prices over the last 10 years but I doubt these people make up the majority of the population. It's the other factors that will hit hard such as high interest rates, rises in the cost of living and fuel prices. That said, if you ignore house prices, we've been living cheaply for many years now, anyone who is in their mid 30's will remember how much more house hold items, electrical goods, tools, cars and food cost 10-15 years ago.
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The End Of Aviation
Interesting article. Fairly one-sided of course, with a title like that, but asks questions that need to be asked. The implication that senior bods within the industry might be ostriching a bit sounds about right for senior bods in ANY sector...!
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and people who have over stretched themselves to buy houses at over inflated prices over the last 10 years but I doubt these people make up the majority of the population
I agree, a house price slump (plummet, nosedive) might not on it's own represent a problem for e.g. the aviation industry. These things rarely happen in isolation tho', the knock on effects are already being felt, and may get worse. "may" get worse, who am I kidding!?
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Spot on 797
Owners have put their problems purely down to Oil prices.
Given that Zoom were running at near capacity and a fair number of their routes were out of GLA... in Scotland.. where house prices are still RISING!!!..I think it fair to say that Oil prices are by far the main reason for the troubles facing low cost carriers!
Anyway, lets hope someone picks up Zooms routes and capacity and that all crew find jobs soon.
Owners have put their problems purely down to Oil prices.
Given that Zoom were running at near capacity and a fair number of their routes were out of GLA... in Scotland.. where house prices are still RISING!!!..I think it fair to say that Oil prices are by far the main reason for the troubles facing low cost carriers!
Anyway, lets hope someone picks up Zooms routes and capacity and that all crew find jobs soon.
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Not a single airline has gone out of business because of a crash in house prices, the reason airlines have gone bust is purely because of oil prices.
If they have had to raise fares to cover costs, and fewer have travelled as they feel worse off - either due to house prices or losing jobs in the financial industry - it is highly conceivable that they were hit from both sides - falling revenue, yields, and rising fuel prices.
What the fuel price saga conceals is the massive over-capacity of the industry in some areas, that is simply unable to support reasonable fare levels. Even in the US, net capacity has until recently been rising, despite prescient comments from many on that not being sustainable.
If Zoom had restricted themselves to Canadain Affair holidays and some scheduled sales on flights to Canadian destinations, instead of diversifying into a full network, long-haul, low-cost carrier, they may have been in a very different situation today.
In conclusion, to blame it on the fuel price alone, is simply half a story. Remember that oil prices are driven by demand - demand that has been created by the worlds' industries themselves, and not some extraneous factor.
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Given that Zoom were running at near capacity and a fair number of their routes were out of GLA...
Any mug can fill a 767 - to do it profitably is business acumen.
Besides, the house prices in Glasgow fell year on year (BBC NEWS | In Depth | UK House Prices | Glasgow City)
Glasgow City:
Average Cost: 139,371
Change in last quarter: 1.1%
Change in last year: -1.5%
Sales: 3,816
lol
Not a single airline has gone out of business because of a crash in house prices, the reason airlines have gone bust is purely because of oil prices. You certainly werent on here predicting an oil spike 12 months ago.
You mention zoom going out of business, but the reason they went out of business was an increased fuel bill of $50 million. To say oil prices is a sideshow is ridiculous. If anything oil prices has been the main event and recession has been the sideshow.
Not a single airline has gone out of business because of a crash in house prices, the reason airlines have gone bust is purely because of oil prices. You certainly werent on here predicting an oil spike 12 months ago.
You mention zoom going out of business, but the reason they went out of business was an increased fuel bill of $50 million. To say oil prices is a sideshow is ridiculous. If anything oil prices has been the main event and recession has been the sideshow.
Oh they all cite oil prices. Ain't the case though.
Overnight Gordon Brown invented £10 Air Passenger Duty and slapped it on every ticket. At that time the typical easyJet fare was £32, Ryanair £34 (they did slightly longer average sectors back then) and therefore the APD represented about a 27% overnight rise in average fares.
The current oil shock from $60 to $120 dollars only adds a similar 27% increase to operating costs and therefore ticket prices.
The difference is that when APD was introduced the economy was ticking along and the customers absorbed the price rises without batting an eyelid. Both companies posted record profits the year after.
The difference now is the recession.
The real difference comes next year. When the actual passenger numbers travelling drops as people choose not to travel at ANY price. The air ticket is a very small component of a trip away. Its marginal price variation due to fuel cost isn't what's going to send airlines bust.
Sorry, oil is the sideshow.
Same as in the 1970's oil shock. The real damage was the resulting recession.
Take a look at economic history. Its illuminating. Probably why they never teach it in school.
WWW