Growing Evidence That The Upturn Is Upon Us
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3Greens
Thanks.
"I'm afraid the global domination you suggest is fundamentally flawed. "
I wouldn't go as far to suggest King MOL is going to dominate the world (if he does, I want to get off). But there is no mistaking that he intends to dish out as many fatal blows as he can. Whether it works or not is going to be down to how deep the airlines pockets are. Some, I suspect are not that deep at all.
We shall see.
Alex Whittingham
I don't dispute the LoCo numbers are up, its just where those passengers are coming from. I find it difficult to accept that the air travel sector is bucking the trend, when every significant sector in the economy is now in decline. I believe those numbers are largely made up of existing business. Its already, widely reported that traffic across the sector is down and an overcapacity exists over and above seasonal adjustments.
Thanks.
"I'm afraid the global domination you suggest is fundamentally flawed. "
I wouldn't go as far to suggest King MOL is going to dominate the world (if he does, I want to get off). But there is no mistaking that he intends to dish out as many fatal blows as he can. Whether it works or not is going to be down to how deep the airlines pockets are. Some, I suspect are not that deep at all.
We shall see.
Alex Whittingham
I don't dispute the LoCo numbers are up, its just where those passengers are coming from. I find it difficult to accept that the air travel sector is bucking the trend, when every significant sector in the economy is now in decline. I believe those numbers are largely made up of existing business. Its already, widely reported that traffic across the sector is down and an overcapacity exists over and above seasonal adjustments.
The easyJet figures now incorporate GB Airways which was bought earlier in 2008. The fleet size is now static or shrinking for this year and next. Redeployment of parts of the fleet to Italy is a distinct possibility as the UK economy goes down the toilet and Alitalia winds down (if it does).
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GB only brought 200,000 odd passengers a month with them, not enough to account for the increase. March 08 Statistics. Even taking GB into account there are still an extra 400,000 passengers flying each month.
Dancing with the devil, going with the flow... it's all a game to me.
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Bottom lines?
Nice to see some stats here but the bottom line is that people will always need to get from A to B...
I say keep plugging away at your studies and worry about the job market when you finally have your qualifications. I am not saying it will be easy to get a job with an airline but then again, when has it ever been easy? If you are contemplating undertaking professional pilot training or are contemplating borrowing/remortgaging I'd say wait. For Gods sake wait!
WWW says it's 1990 all over again but that's just speculation from someone who wants to show they've been around the block a bit. This reccesion could very well damage many airlines, but it might just the same be a storm in a tea cup. At the end of the day air travel has grown hugely in the last 18 years so comparrisons with the last downturn are a little redundant (scuse the pun!) if you ask me.
BA were laying Jumbo's off weeks ago. There has been plenty of warning about this 'crisis' and governments and banks the world over have taken unprecedented action. Hatches have been battened and budgets reduced. The media love the drama and thrust it down all our throats but fail to realise that we're in a new age and anything (including positives) could happen.
Keep yer chins up. I don't think it's gonna be easy but like I said above - it never has been.
VFE.
I say keep plugging away at your studies and worry about the job market when you finally have your qualifications. I am not saying it will be easy to get a job with an airline but then again, when has it ever been easy? If you are contemplating undertaking professional pilot training or are contemplating borrowing/remortgaging I'd say wait. For Gods sake wait!
WWW says it's 1990 all over again but that's just speculation from someone who wants to show they've been around the block a bit. This reccesion could very well damage many airlines, but it might just the same be a storm in a tea cup. At the end of the day air travel has grown hugely in the last 18 years so comparrisons with the last downturn are a little redundant (scuse the pun!) if you ask me.
BA were laying Jumbo's off weeks ago. There has been plenty of warning about this 'crisis' and governments and banks the world over have taken unprecedented action. Hatches have been battened and budgets reduced. The media love the drama and thrust it down all our throats but fail to realise that we're in a new age and anything (including positives) could happen.
Keep yer chins up. I don't think it's gonna be easy but like I said above - it never has been.
VFE.
WWW says it's 1990 all over again but that's just speculation from someone who wants to show they've been around the block a bit. This reccesion could very well damage many airlines, but it might just the same be a storm in a tea cup. At the end of the day air travel has grown hugely in the last 18 years so comparrisons with the last downturn are a little redundant (scuse the pun!) if you ask me.
I was more worried about my GCSE's in 1990 than the recession so I haven't been around this particular block before.
You think that making comparisons with the previous serious recession (which is what we now have) are redundant. I can't understand that point of view. Sure history never repeats itself exactly but there has to be some merit in studying it as a guide to the present and future. No?
To replicate the loss of Dan and Air Europe this time the industry would have to see, say, easyJet and Thomson go bust. Roughly 3,000 pilots between them because, as you point out, the industry has grown enormously.
The tiddlers like XL and SilverJet going pop is neither serious nor a suprise. Very bad news for Wannabes but not a disaster.
My strong suspicion is that 2009 will present a Wannabe disaster.
Storm in a teacup this will not be. Point in history is far more likely.
WWW
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There is no use comparing loads from October 2007 with October 2008 as business travel numbers would be relatively similar and families who had booked holidays will have done so well before the sh*t really started to hit the fan.
The big test will come during the approaching Xmas holidays and next years Easter and Summer breaks. Airlines traditionally charge 'Peak' fares during these periods to offset the losses or poor profits during the Off Peak months. However with families spending their holidays at home to save the pennies, airlines will have to charge off peak rates all year round to fill the seats. This is an impossible situation for the airlines and their tight ships!
And, don't forget about the decreasing value of the pound. I live in DXB and the exchange rate has fallen from 7.2 to 5.6 dirhams to the pound. Thats huge, and its a situation echoed around the world. Expect to see more families holidaying at home or in Europe.
Its going to be a disaster, and wannabes need to know that so they don't end up 'flipping burgers at Mcdonalds.' Will it be worse than 1990? Of course it will, as there are many more airlines to go bust or need to scale down.
Please don't get nieve folks. Wait until February when the airlines are reeling from their Xmas losses and battening down the hatches to prepare for their 'Off Peak' months.
Another few cents from DB
The big test will come during the approaching Xmas holidays and next years Easter and Summer breaks. Airlines traditionally charge 'Peak' fares during these periods to offset the losses or poor profits during the Off Peak months. However with families spending their holidays at home to save the pennies, airlines will have to charge off peak rates all year round to fill the seats. This is an impossible situation for the airlines and their tight ships!
And, don't forget about the decreasing value of the pound. I live in DXB and the exchange rate has fallen from 7.2 to 5.6 dirhams to the pound. Thats huge, and its a situation echoed around the world. Expect to see more families holidaying at home or in Europe.
Its going to be a disaster, and wannabes need to know that so they don't end up 'flipping burgers at Mcdonalds.' Will it be worse than 1990? Of course it will, as there are many more airlines to go bust or need to scale down.
Please don't get nieve folks. Wait until February when the airlines are reeling from their Xmas losses and battening down the hatches to prepare for their 'Off Peak' months.
Another few cents from DB
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I now live in Dubai and echo what Desert Budgie has said... it is now bloomin expensive for Brits to come here... although nice for us paid in Dirham when we trot off back home.
Face it even the most optimistic people now appreciate 2009 will be a complete write-off.The best we can hope for is a stabilistation in 2010... There is no point starting training for at least 12 months if you ask me.
That said came back on a packed 380 from NY on Thursday night... wonder how long that will last....
Face it even the most optimistic people now appreciate 2009 will be a complete write-off.The best we can hope for is a stabilistation in 2010... There is no point starting training for at least 12 months if you ask me.
That said came back on a packed 380 from NY on Thursday night... wonder how long that will last....
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Some food for thought on the BA "profits" of last year - FT.com:
FT Alphaville » Blog Archive » A profits engine, or simple engineering, at BA?
A profits engine, or simple [financial] engineering, at BA?
The shares may have jumped 22 per cent at the opening on Friday - but does the unexpected forecast of a 1 per cent increase in revenues at British Airways really detract from the overall gloomy picture painted by the interim figures?
From Bloomberg:
The net loss of 49 million pounds ($77 million), or 4.3 pence a share, compared with net income of 493 million pounds, or 42.9 pence, a year earlier, British Airways said in a statement today. Analysts had estimated profit of 64 million pounds. Sales rose 6.4 percent to 4.75 billion pounds, beating the average analyst estimate of 4.57 billion pounds.
Oops!
What makes it worse, is that business has been in dire straits for some time now. The much-lauded 10 per cent operating profit margin - barely achieved last fiscal-year and used as a benchmark to restart dividend payments - was helped along by a clever accounting trick, not a genuine improvement in business levels.
The airline changed the depreciation period for their RB211 engines, generating a £32.5m decrease in annual depreciation charges, et voila, CEO Willie Walsh gets his 10 per cent margin despite the fiasco that was Terminal 5’s opening and rising fuel costs.
Now the realities of BA’s operating environment are catching up on them — the rapid shrinking of their premium business segment, heightened competition from competitors’ like Deutsche Lufthansa and management preoccupied with what looks to be a floundering merger attempt with Iberia.
At least fuel costs are coming down. Oh wait.
The fuel bill for the year is still expected to be some £3 billion as exchange and hedging have offset lower fuel prices.
FT Alphaville » Blog Archive » A profits engine, or simple engineering, at BA?
A profits engine, or simple [financial] engineering, at BA?
The shares may have jumped 22 per cent at the opening on Friday - but does the unexpected forecast of a 1 per cent increase in revenues at British Airways really detract from the overall gloomy picture painted by the interim figures?
From Bloomberg:
The net loss of 49 million pounds ($77 million), or 4.3 pence a share, compared with net income of 493 million pounds, or 42.9 pence, a year earlier, British Airways said in a statement today. Analysts had estimated profit of 64 million pounds. Sales rose 6.4 percent to 4.75 billion pounds, beating the average analyst estimate of 4.57 billion pounds.
Oops!
What makes it worse, is that business has been in dire straits for some time now. The much-lauded 10 per cent operating profit margin - barely achieved last fiscal-year and used as a benchmark to restart dividend payments - was helped along by a clever accounting trick, not a genuine improvement in business levels.
The airline changed the depreciation period for their RB211 engines, generating a £32.5m decrease in annual depreciation charges, et voila, CEO Willie Walsh gets his 10 per cent margin despite the fiasco that was Terminal 5’s opening and rising fuel costs.
Now the realities of BA’s operating environment are catching up on them — the rapid shrinking of their premium business segment, heightened competition from competitors’ like Deutsche Lufthansa and management preoccupied with what looks to be a floundering merger attempt with Iberia.
At least fuel costs are coming down. Oh wait.
The fuel bill for the year is still expected to be some £3 billion as exchange and hedging have offset lower fuel prices.
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Yes Topslide, I heard you, but putting your simplistic statement in capital letters and saying 'one last time' doesn't make you right. You gloomy lot just keep restaing your case to each over over and over, convinced that parotting Mr Preston makes you right and everybody else is, stupid, naive, etc.. Actually you only have an opinion, and there are those whose opinions differ from yours.
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CTC: "Pilot Shortage"
CTC Press Release April 2008:
1800!?!?
How times change. Lucky if it'll be 18 new joiners now over the next year...
PILOT SHORTAGE LOOMING, BUT INTEREST IN BECOMING AN AIRLINE PILOT SOARS
Reporting on a recent Pilot Resource Forum hosted by CTC, at which the senior management of many of the UK airlines were in attendance, the Founder and Chairman of CTC, Capt Chris Clarke,noted that the anticipated requirement for new pilots to enter the airline industry over the next year was at an all time high and, according to the expectations of the airlines present at the Forum, is expected to be in excess of 1800 .
Reporting on a recent Pilot Resource Forum hosted by CTC, at which the senior management of many of the UK airlines were in attendance, the Founder and Chairman of CTC, Capt Chris Clarke,noted that the anticipated requirement for new pilots to enter the airline industry over the next year was at an all time high and, according to the expectations of the airlines present at the Forum, is expected to be in excess of 1800 .
How times change. Lucky if it'll be 18 new joiners now over the next year...
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CTC Press Release April 2008:
Quote:
PILOT SHORTAGE LOOMING, BUT INTEREST IN BECOMING AN AIRLINE PILOT SOARS
Reporting on a recent Pilot Resource Forum hosted by CTC, at which the senior management of many of the UK airlines were in attendance, the Founder and Chairman of CTC, Capt Chris Clarke,noted that the anticipated requirement for new pilots to enter the airline industry over the next year was at an all time high and, according to the expectations of the airlines present at the Forum, is expected to be in excess of 1800 .
1800!?!?
How times change. Lucky if it'll be 18 new joiners now over the next year...
Quote:
PILOT SHORTAGE LOOMING, BUT INTEREST IN BECOMING AN AIRLINE PILOT SOARS
Reporting on a recent Pilot Resource Forum hosted by CTC, at which the senior management of many of the UK airlines were in attendance, the Founder and Chairman of CTC, Capt Chris Clarke,noted that the anticipated requirement for new pilots to enter the airline industry over the next year was at an all time high and, according to the expectations of the airlines present at the Forum, is expected to be in excess of 1800 .
1800!?!?
How times change. Lucky if it'll be 18 new joiners now over the next year...
Seriously, though, GM and Ford are staring bankruptcy in the eye. That is major. I wouldn't be worried about securing a pilot job... I'd be worried about securing any job for the next few years until the system straightens itself out again.
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it is staggering just how many people are either unaware or ignorant of the word 'yield', and it's effect upon the business. People think full aircraft means a successful business and visa versa.
You mention yield management and then talk of selling 1p tickets - that is just the headline price. There will always be a percentage of seats sold late, at a high price. High load factors therefore means more expensive seats are sold, if an airline is any good at yield management in the first place.
Also high load factors means more ancillary revenue generated - I work for a loco and all our cabin crew have battered into them is spend-per-head targets. The big area of profit growth is what is sold on board, so the load factor is hugely important. I take your point that filling an aircraft with pax who have paid the square root of nothing for the seat is not a sustainable business plan, but a high load factor is still important. The cost of the seat in loco world is becoming secondary to the profits made through what is sold on board, for that you need bums on seats.
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OK, so the formula for profit = success relies on number of sales, ticket price, load factors and costs with additional peripheral deals from airports and regional administrations and ancillary sales on board.
The arguement on this thread used to be that passenger numbers would fall but we have evidence that numbers of ticket sales are holding good, as are load factors. Costs should be on their way down now that oil is back to $65 a barrel and there's no upward pressure on wages, commercial rents etc. Ryanair fired a very big shot across the bows of any regional governments by pulling out of Valencia last month. So what have you got left? Any evidence that the mean price per seat has fallen significantly?
The arguement on this thread used to be that passenger numbers would fall but we have evidence that numbers of ticket sales are holding good, as are load factors. Costs should be on their way down now that oil is back to $65 a barrel and there's no upward pressure on wages, commercial rents etc. Ryanair fired a very big shot across the bows of any regional governments by pulling out of Valencia last month. So what have you got left? Any evidence that the mean price per seat has fallen significantly?
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Alex, forward bookings are almost nonexistent for next year with some of the big carriers. Which is almost unheard of.
As we know, CASH IS KING. NO CASH, NO FLIGHTS. NO FLIGHTS = NO AIRLINE.
NO AIRLINE = NO JOBS
As we know, CASH IS KING. NO CASH, NO FLIGHTS. NO FLIGHTS = NO AIRLINE.
NO AIRLINE = NO JOBS
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The airlines out there who are selling tickets for 1 pence and suffering the losses on whatever cash reserves they may have are playing a VERY dangerous game indeed. Profits are falling through the floor and absolutely no one has any idea just how deep and how long lasting this recession is going be. That money will only last so long, and if the fundamentals of the business are not sound and the demand is extremely price sensitive, irrespective of product, then there can only be trouble on the horizon. Of course, certain airlines have made most of their money through having purchased large numbers of aircraft cheaply. They, however, are the self same airlines who are now finding the bottom has dropped out of the leasing market, and in a time when they wish to reduce capacity and consolidate, they are still getting new aircraft delivered. Despite this, and once ambitious expansion plans, recruitment in the UK has all but ground to a stuttering halt.
Which airlines went bust in the last recession and what proportion of the market did they represent?
Scale that answer to today and then be very afraid.
The UK could lose 300 jets over the next 2 years. Easily.
I don't give a rats ass about a couple of percentage of load factor here there or anywhere. The only survival plan amongst UK airlines is to outlast their competitors. Then take their market share and restore margin.
This is a cash bleeding competition. Nothing else.
WWW
Scale that answer to today and then be very afraid.
The UK could lose 300 jets over the next 2 years. Easily.
I don't give a rats ass about a couple of percentage of load factor here there or anywhere. The only survival plan amongst UK airlines is to outlast their competitors. Then take their market share and restore margin.
This is a cash bleeding competition. Nothing else.
WWW
I promise Wannabes on pain of eating my Kangaroo skin hat with salt and pepper that in 2009 several significant EU airlines will go bust. By several I mean >10 and by significant I mean having more than >30 jets.
That alone will put 1,000's of unemployed pilots onto a stagnant market. Rush to join them at your peril.
WWW
ps People said I was doom mongering armchair economist 18 months ago when I said a house price crash was going to happen. 12 months ago when I promised them a large recession was afoot I was castigated. Of course this time I could be wrong.
That alone will put 1,000's of unemployed pilots onto a stagnant market. Rush to join them at your peril.
WWW
ps People said I was doom mongering armchair economist 18 months ago when I said a house price crash was going to happen. 12 months ago when I promised them a large recession was afoot I was castigated. Of course this time I could be wrong.