Growing Evidence That The Upturn Is Upon Us
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Easyjet are reporting a 7.3% increase in December over last year with load factors down 3.3% easyjet.com.
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The bullet points are not mine Alex.. they are Ryanair's
Also an interesting slide in the presentation showing sharp declines in AerLingus passenger numbers.
Plus I imagine those 30 airlines that failed in 2008 aren't carrying too many folks now.
When was the last time Easy's passenger numbers only grew 7%... have they ever grown at such a slow yoy change? Fall in load factor has to be a big concern as it tells you less bums on seats per aircraft.... + how much discounting are they having to do??
Reading your post folks will get a distorted view of what it is like for fresh frozen ATPL holders at the moment Alex... both Ryanair and Easy have hiring freezes in place and Easy is getting rid of CTC cadets after their 6 months stint... so they are getting rid of pilots not hiring them.... how does that fit in with your passenger number data??
This thread helps knock some of the gloss off the picture FTOs like your own (which is one of the best) like to paint in wanabees eyes.
Also an interesting slide in the presentation showing sharp declines in AerLingus passenger numbers.
Plus I imagine those 30 airlines that failed in 2008 aren't carrying too many folks now.
When was the last time Easy's passenger numbers only grew 7%... have they ever grown at such a slow yoy change? Fall in load factor has to be a big concern as it tells you less bums on seats per aircraft.... + how much discounting are they having to do??
Reading your post folks will get a distorted view of what it is like for fresh frozen ATPL holders at the moment Alex... both Ryanair and Easy have hiring freezes in place and Easy is getting rid of CTC cadets after their 6 months stint... so they are getting rid of pilots not hiring them.... how does that fit in with your passenger number data??
This thread helps knock some of the gloss off the picture FTOs like your own (which is one of the best) like to paint in wanabees eyes.
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Oh dear, you can't be serious. Do we have to do all this again?
1. 30 failed airlines. Er, which ones? Oh, yes, the ones with the dodgy business models and/or the highly leveraged ones, some US domestic airlines and some minor European ones. In the UK you have Euromanx, European Aviation Air Charter, Silverjet, XL and Zoom.
2. Easy's traffic only grew by 7%. What is wrong with 7% growth? Sounds good to me considering the Pestonites have predicted the end of the world. It's like complaining Ryanair only made €215 million in the half year to Sep 08. Only??
4. Fall in load factors a big concern? Doh. They went up 3.4% in November and they dropped 3.3% in December.
3. True, both Easy and Ryanair have hiring freezes in place. I'm pleased you have noticed the inconsistency. A hiring freeze in place with consistent increased traffic loads will probably lead to a recruitment requirement in the spring. Wait and see.
This is what I said in October and November:
'Again, you misunderstand me. I completely agree that this is a time for wannabees to be extremely cautious, particularly with borrowed money. I am merely observing that the data from the Low Costs, from as recently as October, flies in the face of your arguements and predictions.'
Pse delete 'October' insert 'December'
And finally, you suggest that FTOs like to paint a glossy picture for wannabees. I disagree with you, I have found that people are generally very honest. I don't suppose you have any evidence for this accusation or is this just another opinion?
1. 30 failed airlines. Er, which ones? Oh, yes, the ones with the dodgy business models and/or the highly leveraged ones, some US domestic airlines and some minor European ones. In the UK you have Euromanx, European Aviation Air Charter, Silverjet, XL and Zoom.
2. Easy's traffic only grew by 7%. What is wrong with 7% growth? Sounds good to me considering the Pestonites have predicted the end of the world. It's like complaining Ryanair only made €215 million in the half year to Sep 08. Only??
4. Fall in load factors a big concern? Doh. They went up 3.4% in November and they dropped 3.3% in December.
3. True, both Easy and Ryanair have hiring freezes in place. I'm pleased you have noticed the inconsistency. A hiring freeze in place with consistent increased traffic loads will probably lead to a recruitment requirement in the spring. Wait and see.
This is what I said in October and November:
'Again, you misunderstand me. I completely agree that this is a time for wannabees to be extremely cautious, particularly with borrowed money. I am merely observing that the data from the Low Costs, from as recently as October, flies in the face of your arguements and predictions.'
Pse delete 'October' insert 'December'
And finally, you suggest that FTOs like to paint a glossy picture for wannabees. I disagree with you, I have found that people are generally very honest. I don't suppose you have any evidence for this accusation or is this just another opinion?
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I would suggest Alex you quit fighting the tide. We are in recession and its not going to be a nice year! I would concentrate on ensuring your school keeps it head above water for the comming storn of 2009, rather than having a pop on here. By the way your school is very good, and I have not heard a bad comment made about it. Let that be a credit to you. Well done.
1. 30 failed airlines. Er, which ones? Oh, yes, the ones with the dodgy business models and/or the highly leveraged ones
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Yeah but I think it is worth pointing out that the likes of FR and ezy are not doing as badly as many, including their own management, thought they would be doing. I can accept positive load factors up to the end of oct 08 were down to bookings made well in advance, but load factors over xmas for FR and ezy have indicated that the demand for discretionary air travel has not slumped just yet.
It is still hard to call just how far demand will drop off, as poor load factors for the next two months are to be expected whatever the economic picture. easyJet's cautious forecast of profit for the next year is dependant on the summer being better than current expectations. If it is, maybe that raft of airline failures will be somewhat smaller than expected aswell.
Although for anyone about to sign up to an integrated course, I've been paying off my debt from CTC to the bank at a rate of £1000 a month for the past 30 months. I borrowed 60K, in 2004, at a rate of 2% above base. How much do you think I still owe HSBC?
Answers on a postcard..............
It is still hard to call just how far demand will drop off, as poor load factors for the next two months are to be expected whatever the economic picture. easyJet's cautious forecast of profit for the next year is dependant on the summer being better than current expectations. If it is, maybe that raft of airline failures will be somewhat smaller than expected aswell.
Although for anyone about to sign up to an integrated course, I've been paying off my debt from CTC to the bank at a rate of £1000 a month for the past 30 months. I borrowed 60K, in 2004, at a rate of 2% above base. How much do you think I still owe HSBC?
Answers on a postcard..............
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Originally Posted by expedite08
I would suggest Alex you quit fighting the tide.
Originally Posted by Alex Whittingham
This is what I said in October and November:
'Again, you misunderstand me. I completely agree that this is a time for wannabees to be extremely cautious, particularly with borrowed money. I am merely observing that the data from the Low Costs, from as recently as October, flies in the face of your arguements and predictions.'
Pse delete 'October' insert 'December'
'Again, you misunderstand me. I completely agree that this is a time for wannabees to be extremely cautious, particularly with borrowed money. I am merely observing that the data from the Low Costs, from as recently as October, flies in the face of your arguements and predictions.'
Pse delete 'October' insert 'December'
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The UK package holiday capacity reductions for Summer 2009 between the 2 remaining operators (TUI Travel and Thomas Cook) are a total of approx. 24% compared to what was on sale in 2008. This has increased the price of a holiday for this summer by 10%...both companies outlooks are very good, albeit the next few months will confirm...
I would expect easyJet and Ryanair to do 'ok' this summer with that in mind...
It's winter 09/10 that's scaring the heebeejeebee's out of me!!!!
P.s. I got Alex's post first time too! Personally enjoy Mr Whittingham's writings against the Doom and Gloom spreaders...
I would expect easyJet and Ryanair to do 'ok' this summer with that in mind...
It's winter 09/10 that's scaring the heebeejeebee's out of me!!!!
P.s. I got Alex's post first time too! Personally enjoy Mr Whittingham's writings against the Doom and Gloom spreaders...
Indeed. Winter 09/10 is the Main Event. What we have seen so far is similar to the High Street. The weak, the odd, the dying for years, have all gone to the wall.
The wave of unemployment which is now baked in the cake for 2009 will be the real issue.
Once again, a study of the 1990 - 1992 period bears considerable fruit. The big airline failures came after the unemployment peak. Which in turn came after the stock market slump and house price crash and formal recession.
The HPC and Recession are now broadly beyond dispute and the stock market slump is a fact. The unemployment tidal wave is poo-poo'd by only the most optimistic and the bit we seem to be in denial about here is the big airline failures.
You have to wait for fuel hedges, currency hedges, loan arrangements and revolving credit facilities to expire before you really find out whose swimming with no trunks on. It takes time. Winter 09/10 will be that time. That is even more depressing for the eager Wannabe or someone currently training for whom the timescale of the slump needs to be as short as possible. Training is quick. The economy is slow.
And on another, broader note, I think its likely that when the crisis is over what the industry will return to will not be what it left.
By this I mean the last decade has been a bubble. A bubble in finance, housing, stock markets, commodities and most of all debt. That bubble has given us easyJet, Ryanair and all the others. Between them at least 300 new aircraft in the UK, many of them jets. That won't happen again. It won't.
What will happen is a return to a more normal (50yr norm) industry with growth in line with the general economy of around 4%. At best. You'll have small growth plus retirement plus loss of medical. Beyond that you are not going to see rampant demand for pilots for some decades. Really. The market has done a very good job in providing very cheap air transport just where and when there is any reasonable demand. We're kind of done now in the UK.
Other, large, EU countries have not had this. They are ripe for it.
Perhaps the best advice I could give a Wannabe currently cooling their heels is to learn a foreign language. German, Spanish, Italian, French would seem to be equally useful. You may well find that even a British airline would far rather you command one of those languages than have a thousand hours in your log book.
WWW
The wave of unemployment which is now baked in the cake for 2009 will be the real issue.
Once again, a study of the 1990 - 1992 period bears considerable fruit. The big airline failures came after the unemployment peak. Which in turn came after the stock market slump and house price crash and formal recession.
The HPC and Recession are now broadly beyond dispute and the stock market slump is a fact. The unemployment tidal wave is poo-poo'd by only the most optimistic and the bit we seem to be in denial about here is the big airline failures.
You have to wait for fuel hedges, currency hedges, loan arrangements and revolving credit facilities to expire before you really find out whose swimming with no trunks on. It takes time. Winter 09/10 will be that time. That is even more depressing for the eager Wannabe or someone currently training for whom the timescale of the slump needs to be as short as possible. Training is quick. The economy is slow.
And on another, broader note, I think its likely that when the crisis is over what the industry will return to will not be what it left.
By this I mean the last decade has been a bubble. A bubble in finance, housing, stock markets, commodities and most of all debt. That bubble has given us easyJet, Ryanair and all the others. Between them at least 300 new aircraft in the UK, many of them jets. That won't happen again. It won't.
What will happen is a return to a more normal (50yr norm) industry with growth in line with the general economy of around 4%. At best. You'll have small growth plus retirement plus loss of medical. Beyond that you are not going to see rampant demand for pilots for some decades. Really. The market has done a very good job in providing very cheap air transport just where and when there is any reasonable demand. We're kind of done now in the UK.
Other, large, EU countries have not had this. They are ripe for it.
Perhaps the best advice I could give a Wannabe currently cooling their heels is to learn a foreign language. German, Spanish, Italian, French would seem to be equally useful. You may well find that even a British airline would far rather you command one of those languages than have a thousand hours in your log book.
WWW
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I fully understand what Alex is saying... got it a long time ago. Will be interesting to have the discussion when either Ryanair or Easy passenger growth goes negative.... + I assume that you are stripping out GB airways acquisition (complete end of Jan) from your 7% growth yoy at Easy to get to an underlying number... oooh you weren't?? But GB were moving c200-250kk people a month... ex that 200-250k there would have been negative growth in underlying passenger numbers in Nov and no growth in Dec... there are lies damn lies and statistics.... 
... my issue is that the numbers you quote can be miss-leading to some wanabees.... I have no problem with you openly saying wanabees should be cautious... (which of course helps your (very good) modular school at the expense of integrated).
The problem is that even Easy and ryanairs growth is slowing significantly and they will also be cannibalising legacy carriers.
Bottom line there are very few/no jobs out there for wanabees. Even highly levered airlines that go bust put experienced pilots on the market. Gaining comfort from Alex's numbers is folly. If you disagree please list the airlines that are likely to hire low hour wanabees in the next 12 months??
Recruitment requirement in the spring.... I look forward to a few people on CTC's new "flexi scheme" getting thrown a bone for a 6 month stint on £1k a month.... then put back in the queue at the job centre
To say FTOs don't paint a glossy picture... well we will just have to disagree on that.
... my issue is that the numbers you quote can be miss-leading to some wanabees.... I have no problem with you openly saying wanabees should be cautious... (which of course helps your (very good) modular school at the expense of integrated).The problem is that even Easy and ryanairs growth is slowing significantly and they will also be cannibalising legacy carriers.
Bottom line there are very few/no jobs out there for wanabees. Even highly levered airlines that go bust put experienced pilots on the market. Gaining comfort from Alex's numbers is folly. If you disagree please list the airlines that are likely to hire low hour wanabees in the next 12 months??
Recruitment requirement in the spring.... I look forward to a few people on CTC's new "flexi scheme" getting thrown a bone for a 6 month stint on £1k a month.... then put back in the queue at the job centre
To say FTOs don't paint a glossy picture... well we will just have to disagree on that.
GSB,
I haven't read enough relevant posts to form a view on whether FTOs paint a glossy picture or not but the fact is they are businesses who need cash to survive.
The have an obligation to their staff and shareholders to return a profit and keep them employed. Some may entice their clients (ie students) with the promise of job placement, contacts etc. but the bottom line is they train you for a license and that's it. Anything else is a bonus.
If you don't want to spend your cash, you don't have to you. But if FTOs do put a spin on the current climate to try and stay afloat, well good luck to them - that's business and you get it in every industry.
You're having a pop at Alex, but I've always found him to be positive and encouraging to wanabees and from what I've seen, he has only been stating facts to support his case.
There are some FTO staff who post on here anonymously - if they are deliberately misleading, you can't legislate for that and you just have to accept that it may happen on a forum like this. Anyone with half an ounce of wit will do some thorough research before splasing their cash.
P
I haven't read enough relevant posts to form a view on whether FTOs paint a glossy picture or not but the fact is they are businesses who need cash to survive.
The have an obligation to their staff and shareholders to return a profit and keep them employed. Some may entice their clients (ie students) with the promise of job placement, contacts etc. but the bottom line is they train you for a license and that's it. Anything else is a bonus.
If you don't want to spend your cash, you don't have to you. But if FTOs do put a spin on the current climate to try and stay afloat, well good luck to them - that's business and you get it in every industry.
You're having a pop at Alex, but I've always found him to be positive and encouraging to wanabees and from what I've seen, he has only been stating facts to support his case.
There are some FTO staff who post on here anonymously - if they are deliberately misleading, you can't legislate for that and you just have to accept that it may happen on a forum like this. Anyone with half an ounce of wit will do some thorough research before splasing their cash.
P
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He's not having a go at Alex.
He's just pointing out that the "facts" Alex quotes can be miss-leading e.g. if you strip out acquisitions at Easy growth rate looks very differnt.
Some might find that useful.
Nor hasGSB said that FTOs don't have the right to put a gloss on things.
He just says to say they don't necessary give a fair picture because they have to sell a product or in some case go out of business.
GSB simply points out this is the worst pilot recruitment market in decades and the outlook is grim despite all Alex's efforts at "turd polishing".
And I say that with the upmost respect for Alex and his school.
He's just pointing out that the "facts" Alex quotes can be miss-leading e.g. if you strip out acquisitions at Easy growth rate looks very differnt.
Some might find that useful.
Nor hasGSB said that FTOs don't have the right to put a gloss on things.
He just says to say they don't necessary give a fair picture because they have to sell a product or in some case go out of business.
GSB simply points out this is the worst pilot recruitment market in decades and the outlook is grim despite all Alex's efforts at "turd polishing".
And I say that with the upmost respect for Alex and his school.
Well, having just re-read the posts, I think he was but I'm not one for arguing.
The point I was making is that you can't blame FTOs for drumming up business - they need to survive, just like any other industry.
If I ran an FTO in the current climate, I'd be jumping up and down offering PPL + hr bldg + groundschool packages on the basis that you can hold off the expensive flying training until the market picks up. But no doubt, someone would claim that was deluding wanabees.
The point I was making is that you can't blame FTOs for drumming up business - they need to survive, just like any other industry.
If I ran an FTO in the current climate, I'd be jumping up and down offering PPL + hr bldg + groundschool packages on the basis that you can hold off the expensive flying training until the market picks up. But no doubt, someone would claim that was deluding wanabees.
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But airlines increase traffic loads by flying more passengers on existing routes and by opening up new routes. In the case of the GB acquisition new routes were acquired en-masse. It's as meaninful to strip out the passenger figures from GB as it is to strip out passenger figures from all the other new routes and then say 'told you so, they aren't flying many more passengers on their old routes'.
This is like a Monty Python sketch....'Well OK, apart from the traffic growth, good load factors, expanding route structure and millions of pounds of profit they aren't doing very well, are they?'.
Having said that I agree the outlook looks grim. We differ on our forecasts for the depth and duration of the grimness. GSB et associated Eyores are talking the industry into a position which it really isn't in, luckily the opinions held in this little corner of PPRuNe don't seem to actually affect the airlines' performance.
Is this the worst pilot market in decades? I think the cycle is shorter than that, WWW will remember.
This is like a Monty Python sketch....'Well OK, apart from the traffic growth, good load factors, expanding route structure and millions of pounds of profit they aren't doing very well, are they?'.
Having said that I agree the outlook looks grim. We differ on our forecasts for the depth and duration of the grimness. GSB et associated Eyores are talking the industry into a position which it really isn't in, luckily the opinions held in this little corner of PPRuNe don't seem to actually affect the airlines' performance.
Is this the worst pilot market in decades? I think the cycle is shorter than that, WWW will remember.
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Presumably, the LoCo pax numbers are up as travellers move away from the more expensive carriers to the budget airlines?
In my company, we've already moved virtually 100% to Easy/Ryanair to save travel costs with the previously standard BA/BMIs only used when absolutely necessary.
In my company, we've already moved virtually 100% to Easy/Ryanair to save travel costs with the previously standard BA/BMIs only used when absolutely necessary.
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Further afield perhaps?
I know it's pretty gloomy here in Europe. Does anyone know what the situation is like on the other continents? The reason I ask is that I begin my PPL in Feb and plan on doing modular with the bulk of the money saved; no debt, fingers crossed! I'm young and to be honest I'd jump at the chance of living and working somewhere exotic for a couple of years.... Pay wouldn't be an issue so long as I could live off of what I earn.
Any feedback off people doing something similar would be great!
Any feedback off people doing something similar would be great!
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Got to agree with WWW and JB007, not for the first time. Next winter could well be a nightmare.
I work on the financial side of airlines a lot of the time, and the model is this - this summer, most of the carriers will be hoping, as they always do, for decent yields and loads, decent enough to drag them through the winter. This is how it has always worked.
This summer, we are going to see a drop in consumer confidence Europe wide - many people are worried about their jobs, the value of their houses and many other things connected with these two things. Many have over-leveraged themselves. The party for many is well and truly over.
If the airlines can't build up the war chest this summer, and I fear that it is going to be tougher than for a long time for them so to do, the winter is going to be VERY nasty. On top of that, many have already been hit with the credit card companies getting tougher on settlements... and how many have spent cash hedging fuel at $110/barrel? All absorbs cash....
Tin hats on, folks...
TA
I work on the financial side of airlines a lot of the time, and the model is this - this summer, most of the carriers will be hoping, as they always do, for decent yields and loads, decent enough to drag them through the winter. This is how it has always worked.
This summer, we are going to see a drop in consumer confidence Europe wide - many people are worried about their jobs, the value of their houses and many other things connected with these two things. Many have over-leveraged themselves. The party for many is well and truly over.
If the airlines can't build up the war chest this summer, and I fear that it is going to be tougher than for a long time for them so to do, the winter is going to be VERY nasty. On top of that, many have already been hit with the credit card companies getting tougher on settlements... and how many have spent cash hedging fuel at $110/barrel? All absorbs cash....
Tin hats on, folks...
TA
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What came first, Gordon Brown or the recession?
You can believe the headlines too much; do so at your peril as you will only talk yourself into a state of gloom and despair. All this talk of "lowest sales figures this and that" would make us think that it us the consumer who has caused the recession - utter nonsense!
The total shambles, irresponsible lending and unquantified risk-taking of our financial/banking sector is entirely to blame for our economic problems. There are untold examples of perfectly sound businesses going to the wall purely because banks are refusing to continue to finance them in desperate bids to reduce their exposure and improve their own liquidity.
Where there were teams of workers within such institutions actively encouraging businesses to take on more debt and lending, they are now replaced by teams actively encouraging businesses to wrap up and and shut the doors or move to a new bank..........except their competitors are equally stuffed and so wont back them.
All of this has nothing to do with people keeping their hands in their pockets and refusing to spend. However the secondary effects are that it does then create unemployment through such 'forced' liquidation, with the resulting market jitters that follow and a ultimately a lower marginal propensity for consumer consumption......the result = sustained periods of 'reported' actual negative growth (i.e. recession)
What the country really needs is a monumental shot of confidence and I think that can only now come from a general election.
And as far as wannabees are concerned, is now not a good time to prepare yourself for the upswing when it comes?
The total shambles, irresponsible lending and unquantified risk-taking of our financial/banking sector is entirely to blame for our economic problems. There are untold examples of perfectly sound businesses going to the wall purely because banks are refusing to continue to finance them in desperate bids to reduce their exposure and improve their own liquidity.
Where there were teams of workers within such institutions actively encouraging businesses to take on more debt and lending, they are now replaced by teams actively encouraging businesses to wrap up and and shut the doors or move to a new bank..........except their competitors are equally stuffed and so wont back them.
All of this has nothing to do with people keeping their hands in their pockets and refusing to spend. However the secondary effects are that it does then create unemployment through such 'forced' liquidation, with the resulting market jitters that follow and a ultimately a lower marginal propensity for consumer consumption......the result = sustained periods of 'reported' actual negative growth (i.e. recession)
What the country really needs is a monumental shot of confidence and I think that can only now come from a general election.
And as far as wannabees are concerned, is now not a good time to prepare yourself for the upswing when it comes?
Last edited by George Zipper; 8th Jan 2009 at 02:10. Reason: a bit of a tidy up
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What the country really needs is a monumental shot of confidence and I think that can only now come from a general election.
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I don't even think a general election will do
Just another point of interest, has anyone noticed the BOGOF deals on alcohol have increased to more ranges of wines, sprits and beers then before? Maybe we can drink our way out of recession
Last edited by George Zipper; 8th Jan 2009 at 02:11.