Growing Evidence That The Upturn Is Upon Us
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Alex given such wonderful growth and traffic numbers perhaps as yourself one question.... why is there a recruitment freeze at pretty much all of the UK's largest carriers and fleet reductions/aircraft being ground at pretty much all of them??
As Warren Buffet once said "in business the view through the rear view mirror is always clearer than through the windscreen", I appreciate your position in the industry but to say that the average consumers propensity to travel is uneffected by a recession would seem to stretch the imagination.
As Warren Buffet once said "in business the view through the rear view mirror is always clearer than through the windscreen", I appreciate your position in the industry but to say that the average consumers propensity to travel is uneffected by a recession would seem to stretch the imagination.
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I think the fundamental issue here is the differentiation between "discretionary travel" i.e.leisure and non discretionary business / commuter travel. Locos for the most part concentrate on leisure discretionary routes (FR, EZY - although EZY less so) and its these that will obviously be hit.
The likes of FR won't and don't capitalise upon business travellers and routes. Take Paris as an example - FR keep costs down by flying into lower usage regional hubs (Beauvais) which have zero use for business travelling pax. As the credit crunch worsens, people aren't going to want to fly to regional European airports as these really only serve the leisure market and of course as consumers tighten the purse strings leisure traffic will hit an all time low.
You can hedge your fuel and costs until the cows come home, but that has b***er all significance if your route structure doesn't create the required yields.
The likes of FR won't and don't capitalise upon business travellers and routes. Take Paris as an example - FR keep costs down by flying into lower usage regional hubs (Beauvais) which have zero use for business travelling pax. As the credit crunch worsens, people aren't going to want to fly to regional European airports as these really only serve the leisure market and of course as consumers tighten the purse strings leisure traffic will hit an all time low.
You can hedge your fuel and costs until the cows come home, but that has b***er all significance if your route structure doesn't create the required yields.
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How many of these pax booked their seats 3 or even 6 months ago before the true extent of the crisis we are facing was truely known or taking effect.
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Yes, the charge of 'vested interest' is easy to level, but my end of the business is historically not affected much by short and medium term fluctuations. The ATPL is the first step on the professional licensing road and most of my customers are looking at a job market 2 years away when they start with me. Although I do supply material to integrated schools as well, in a downturn people tend to switch to modular so that tends to even out our sales. I'm totally in agreement with WWW, and presumably you, that now is not a good time to start integrated training or to splash on an IR. Whether its a good time to start modular or not depends on your view of the job market in two years time.
Yes, I do seriously mean to suggest that airline recruiters have a notoriously short term view and for the reasons I stated. It would take a very courageous and visionary recruiter to continue blithely through the barrage of warnings about recesssion and, if he did, the gain would be small. People are the same the world over.
The latest data shows passenger numbers up, load factors up and share prices up (yes, I know not as high as last summer) and oil prices down. It strikes me that this extraordinarily gloomy thread has lost touch with reality. All the evidence says the airline industry is OK, in fact more than OK. The rest is speculation.
Edited to add: I should qualify that before the state of the US carriers is raised in objection. I mean most of the UK industry is OK, the American and possibly the Spanish carriers have their own problems. Some of the weaker small UK carriers have, of course, already failed - in line with MOL's predictions - but their failure will have had little effect on the jobs market and, I guess, some of their routes will have been take up by the big boys.
Yes, I do seriously mean to suggest that airline recruiters have a notoriously short term view and for the reasons I stated. It would take a very courageous and visionary recruiter to continue blithely through the barrage of warnings about recesssion and, if he did, the gain would be small. People are the same the world over.
The latest data shows passenger numbers up, load factors up and share prices up (yes, I know not as high as last summer) and oil prices down. It strikes me that this extraordinarily gloomy thread has lost touch with reality. All the evidence says the airline industry is OK, in fact more than OK. The rest is speculation.
Edited to add: I should qualify that before the state of the US carriers is raised in objection. I mean most of the UK industry is OK, the American and possibly the Spanish carriers have their own problems. Some of the weaker small UK carriers have, of course, already failed - in line with MOL's predictions - but their failure will have had little effect on the jobs market and, I guess, some of their routes will have been take up by the big boys.
Last edited by Alex Whittingham; 6th Sep 2008 at 17:05.
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Like Alex, I've been kicking around aviation for more than a couple of decades. Personally, I always look at the long game - Zero to Hero takes significant time. Some (please let's not get into a discussion about the definition of "some") people are undoubtedly in the wrong place at the wrong time but the reality is that there will be a point where there is a light at the end of the tunnel. The important bit will be seeing that light and being in a position to react.
As an ex-RAF type, I have seen the carnage caused when various training courses/schools have been closed due to lack of immediate demand, only for the RAF to have to spend vast amount of money rebuilding that training regime. Inevitably, the demand has then outstripped supply whilst the training system ramps-up. The secret is to get the right people, in the right place, at the right time.
I think most of us agree that the prudent course of action right now is to walk rather than run; that doesn't necessarily mean sitting down on the park bench and giving up.
Sorry for all the cliches, but I'm in that sort of mood.
As an ex-RAF type, I have seen the carnage caused when various training courses/schools have been closed due to lack of immediate demand, only for the RAF to have to spend vast amount of money rebuilding that training regime. Inevitably, the demand has then outstripped supply whilst the training system ramps-up. The secret is to get the right people, in the right place, at the right time.
I think most of us agree that the prudent course of action right now is to walk rather than run; that doesn't necessarily mean sitting down on the park bench and giving up.
Sorry for all the cliches, but I'm in that sort of mood.
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I agree with Topslide... Alex please name which UK airline is "more than okay" at the moment and will be increasing the number of pilots it employs over the next 12-18 months??
I have no argument with modular being the right route at the moment and I personally believe your particular company has the best product in the market but to say airlines are not suffering at the moment is a real stretch.
There is a lot more pain for wannabees to come... we are only 1/3rd of the way through this for the UK economy. US is running 12-18 months ahead of us in this cycle and their unemployment is only just starting to sky rocket.... it would be unusual if ours didn't as well. Its just a good old fashioned economic downturn same as we have had before and we are still going into this one.... not coming out of it.
Alex I don't get your point about #225.... the data is historical and decisions about recruitment are made based off the company's individual view of the outlook.... clearly airlines now believe that has deteriorated signficantly (i.e. more in the WWW camp rather than yours). The fact is they have stopped recruiting.... period. Who knows when they will start again.... to imply this is a temporary kneejerk reaction is not a statment of fact it is your own interpretation. Indeed do you not think it would have been reckless to continue recruiting in the current environment? Would you have seriously made a different decision if you were in their shoes??
I have no argument with modular being the right route at the moment and I personally believe your particular company has the best product in the market but to say airlines are not suffering at the moment is a real stretch.
There is a lot more pain for wannabees to come... we are only 1/3rd of the way through this for the UK economy. US is running 12-18 months ahead of us in this cycle and their unemployment is only just starting to sky rocket.... it would be unusual if ours didn't as well. Its just a good old fashioned economic downturn same as we have had before and we are still going into this one.... not coming out of it.
Alex I don't get your point about #225.... the data is historical and decisions about recruitment are made based off the company's individual view of the outlook.... clearly airlines now believe that has deteriorated signficantly (i.e. more in the WWW camp rather than yours). The fact is they have stopped recruiting.... period. Who knows when they will start again.... to imply this is a temporary kneejerk reaction is not a statment of fact it is your own interpretation. Indeed do you not think it would have been reckless to continue recruiting in the current environment? Would you have seriously made a different decision if you were in their shoes??
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All the evidence says the airline industry is OK, in fact more than OK. The rest is speculation.
http://www.iata.org/pressroom/pr/2008-09-03-01.htm
A summary:
“The situation remains bleak. The toxic combination of high oil prices and falling demand continues to poison the industry’s profitability. We expect losses of US$5.2 billion this year,” said Giovanni Bisignani, IATA’s Director General and CEO.
* North American carriers are expected to post losses of US$5.0 billion in 2008 making them the hardest hit by this industry crisis.
* Asia Pacific is expected to see profits shrink from US$900 million in 2007 to US$300 million this year.
* European profits will tumble seven-fold from US$2.1 billion in 2007 to US$300 million in 2008.
* Middle Eastern profits will drop by US$100 million to US$200 million.
* Latin American and African carriers will see losses deepen to US$300 million and US$700 million respectively.
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Re-heat.
Alex has stressed that he is talking about the UK market.
The article you refer to talks, in the main about the situation facing the US and Latin America, which is so bad that it dominates the overall situation.
The situation is not good but even this depressing report shows that whilst the US and Latin America are suffering massive and unsustainable losses, the industry in Europe is still in profit, all be it greatly reduced from previous years.
As long as a company is in profit and has reasonable cash flow it will continue to trade and support a workforce.
We will no doubt see vigorous efforts to maximize profits, adjustments to routes and seasonal reductions but we are no where near having to face the situation dominating global statistics brought about by US losses.
The holiday season is now over and demand is still high, as I have just experienced on a very full EZY flight from Amsterdam.
No the upturn is NOT upon us but, with the exception of a few operators who’s profit was marginal even in good times, I too believe we will be ‘OK’ in the UK.
There is still recruitment going on, at a much reduced level, and as has been said again and again, modular is the way to go as all predictions are that things will be on the up by the time you complete.
Alex has stressed that he is talking about the UK market.
The article you refer to talks, in the main about the situation facing the US and Latin America, which is so bad that it dominates the overall situation.
The situation is not good but even this depressing report shows that whilst the US and Latin America are suffering massive and unsustainable losses, the industry in Europe is still in profit, all be it greatly reduced from previous years.
As long as a company is in profit and has reasonable cash flow it will continue to trade and support a workforce.
We will no doubt see vigorous efforts to maximize profits, adjustments to routes and seasonal reductions but we are no where near having to face the situation dominating global statistics brought about by US losses.
The holiday season is now over and demand is still high, as I have just experienced on a very full EZY flight from Amsterdam.
No the upturn is NOT upon us but, with the exception of a few operators who’s profit was marginal even in good times, I too believe we will be ‘OK’ in the UK.
There is still recruitment going on, at a much reduced level, and as has been said again and again, modular is the way to go as all predictions are that things will be on the up by the time you complete.
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Funny how outsiders are able to see clearly what so many in the UK appear blind to.
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http://www.itv.com/News/tonight/epis...s/default.html
Watch this Tonight programme from ITV about how bad airlines are facing this winter. Top level management interviewed. Screened at the start of the week.
Once youve watched that:
!
"airline industry in meltdown"
Watch this Tonight programme from ITV about how bad airlines are facing this winter. Top level management interviewed. Screened at the start of the week.
Once youve watched that:
!"airline industry in meltdown"
Last edited by Aerospace101; 7th Sep 2008 at 12:42. Reason: impact
Futura Airlines have ceased trading according to Spanish media reports. 18 years of operation and 27 aircraft.
Be afraid.
WWW
Be afraid.
WWW
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Rex, wait for the US financial markets to go into turmoil tomorrow following federal bail outs of $5.4Trillion. First result will be oil price going back up!!
I agree the tv prog is partly garbish. However theres no debating that airlines are in turmoil! I dont see any recruiting... and thats proably all that counts for everyone on here
I agree the tv prog is partly garbish. However theres no debating that airlines are in turmoil! I dont see any recruiting... and thats proably all that counts for everyone on here
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Alex has stressed that he is talking about the UK market.
I maintain - you have to be loopy to believe that the UK market is not going to be extremely difficult for pilot recruitment.
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With BA's 787's arriving (touch wood) in 2010
And I maintain if you are good enough and plan to be the best of the best you will make it
Rex, good luck with your Oxford/BA dream
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Yeah, I know I'm sticking my neck out at the moment going against the perceived wisdom.
Just out of interest, and before the Dow opens, relate this:
...to what really happened this morning. The FTSE is up 200 points and oil is steady at $105. I will, of course, delete this post if the Dow crashes.
Just out of interest, and before the Dow opens, relate this:
wait for the US financial markets to go into turmoil tomorrow following federal bail outs of $5.4Trillion. First result will be oil price going back up!!
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The good news just keeps on coming
1. Oil falling now $105
2. Flybe big profit rise!!!
3. Stock Market up 3% (transaction so high that LSE computer system fell over)
4. Interest rates low
5 Mortgages rates falling
6 Unemployment low
7 Pound help exports
2. Flybe big profit rise!!!
3. Stock Market up 3% (transaction so high that LSE computer system fell over)
4. Interest rates low
5 Mortgages rates falling
6 Unemployment low
7 Pound help exports