Interesting link (fuel price)
 

Thanks for sharing the IATA fuel economics forecast, relax. An old chum who is now responsible for public policy planning for aviation infrastructure has been bugging me for industry data. Plenty of private forecasts are floating around, of course, but few are likely to be as authoritative, and most are held somewhat private.

Not a lot of optimism contained there, especially for US markets.

On face value, it looks pretty scary. I did some analysis of the effect on DOCs in a different thread and it looks even worse. But the analysis by Roger Bezdek (he really gets going about fuel prices on page 11) shows a different picture.

He links aviation activity to economic activity and not fuel price. I think he makes some good points. The big picture is not so scary. And the recent IATA traffic data show that traffic still keeps growing despite the fuel price.

Some airlines have real problems right now though, and I'm starting to wonder how much of the day to day frenzy about those problems derives from the way that the airline marketing process has evolved. It sounded good to move to internet-based sales and get the money up front and early. But it is incredibly destructive when fuel costs are rising so quickly. Some of these LCC (low cost carrier) planes are taking off full of people who have paid fares so low that the ticket income can't even cover the cost of fuel. Especially if the airline hasn't hedged the fuel cost. Now that creates a specific problem for that airline right now today, but it is not a forerunner of the end of aviation.

Crap idea to sell early and buy late in an inflationary market. Must have been invented by an accountant. Or a management consultancy specialising in aviation.

From 2004, but still makes a lot of sense.

http://www.cato.org/pubs/regulation/...n1/v27n1-1.pdf