Joined: Aug 18, 2005 Posts: 529 Location: Belgium, Europe
Posted: Sun Jun 15, 2008 9:03 am Post subject: Re: Airline Bankruptcy/Merger Thread
2 remarks
-this will not be good for global dimming
-it won't take long before they start charging you by your weight, I call it the fat fee _________________ www.peakoil.be
Joined: Oct 25, 2004 Posts: 1332 Location: Stalag 13
Posted: Mon Jun 16, 2008 8:16 pm Post subject: Re: Airline Bankruptcy/Merger Thread
Air fares could double if oil prices keep rising
Quote:
Airlines may have to double fares this year if crude oil prices rise above $150, industry analyst Michael Boyd warned Friday. Ticket prices will need to jump 80 percent to 100 percent to cover the airlines' jet fuel if oil prices go that high, he said.
"As of June 2008, the entire U.S. air transportation system is operating on borrowed time. Between January and today, the situation has degenerated from a crisis to a survival situation," the president of the Boyd Group said in a report.
"With fuel prices exceeding $3.50 a gallon, the current operation of the industry is totally obsolete," he said. "Worse, most of the nearly fully booked flights in July and August will be carrying passengers that paid fares well below the new fuel-driven break-even point."
Posted: Mon Jun 16, 2008 9:28 pm Post subject: Re: Airline Bankruptcy/Merger Thread
I plan on making my final airplane trip, possibly ever, in the first half of August (and this from a guy in his mid-20's).
I do not see affordable air travel making a return anytime soon after that. Until then, go Frontier!, don't turn your Chapter 11 into 7 just yet! _________________ "It's called the American Dream because you'd have to be asleep to believe it."
"MONTREAL — Air Canadawill cut up to 2,000 jobs at the end of this year as it sharply reduces capacity to deal with the rising cost of fuel, and is warning there are likely more cutbacks to come.
Canada's biggest airline said Tuesday it needs to fly fewer trips as oil prices keep rising to record levels and will cut capacity by 7 per cent from its fall and winter schedule.
Fewer flights mean the airline will require less staff to operate across all levels of the organization, the company said."
I get the feeling there going to have to cut a bit more than anticipated then close down altogether as hardly anyone will be able to afford the ticket prices.
Posted: Tue Jun 17, 2008 10:01 am Post subject: Re: Airline Bankruptcy/Merger Thread
If the airlines started charging by weight, what guidelines would they use. 60% of mericans are overweight or obese, so there is a lot of room for extra charges on American passengers.
Also, however, would someone who is quite slim get a reduction?
Posted: Tue Jun 17, 2008 7:20 pm Post subject: Re: Airline Bankruptcy/Merger Thread
Quote:
NEW YORK (MarketWatch) -- Airlines are getting behind a bill before Congress this week that calls for increased federal regulation of the petroleum futures markets in the hope its passage would ease speculative pressure that they say has helped drive prices for
jet fuel to record-high levels.
"The impact of these unprecedented jet fuel prices on the airlines is devastating and airlines may see 2008 losses nearing $10 billion," said James May, chief executive of the Air Transport Association, in a Tuesday release. "This year, airlines will spend more than $61 billion on fuel, slightly more than the total fuel bill combined for the first four years of this decade."
"If the country does not act soon, this will not be a viable airline industry," he said.(snip)
WASHINGTON, June 17 (Reuters) - U.S. airlines projected on Tuesday they could lose $10 billion in 2008 due to skyrocketing fuel costs, a sum that would almost match the industry's worst-ever year loss in 2002.
James May of the Air Transport Association also told a joint U.S. Senate hearing on speculative trading in the oil markets that up to 200 communities could lose airline service as a result of carrier capacity cuts that are being imposed to save money.
"This nation's economy is inextricably linked to the viability of its air transportation system. If the airlines continue to spiral downward, so will the economy," May said.(snip)
Joined: Mar 07, 2007 Posts: 301 Location: Houston, TX
Posted: Tue Jun 17, 2008 7:59 pm Post subject: Re: Airline Bankruptcy/Merger Thread
Here is what I don't understand
Shouldn't the airlines arse the prices at least to cover the costs and see if the demand is there, and if not cancel the flights.
But what they do is, they don't even raise the prices to necessary levels to make a living and they go head and cut the flights early on. Yet they still lose money on current flights.
I think they should raise the prices to a break even level and if the demand drops they will cancel the flights.
But why are they cutting flights and keep the flights cheaper than cost?
Posted: Tue Jun 17, 2008 8:32 pm Post subject: Re: Airline Bankruptcy/Merger Thread
misterno said:
Quote:
But why are they cutting flights and keep the flights cheaper than cost?
Does anyone understand this stupidness?
They do it because their fixed overhead means that it is the smallest loss that they can incur. Losing traffic would cost them even more money. Their choice now is to lose a lot of money, or lose a little bit less.
What they are now doing is like trying to swim with an anvil tied around their neck!
Posted: Tue Jun 17, 2008 8:41 pm Post subject: Re: Airline Bankruptcy/Merger Thread
misterno wrote:
Here is what I don't understand
Shouldn't the airlines arse the prices at least to cover the costs and see if the demand is there, and if not cancel the flights.
But what they do is, they don't even raise the prices to necessary levels to make a living and they go head and cut the flights early on. Yet they still lose money on current flights.
I think they should raise the prices to a break even level and if the demand drops they will cancel the flights.
But why are they cutting flights and keep the flights cheaper than cost?
Does anyone understand this stupidness?
put yourself in their shoes.
If you raise prices you'll lose customers and will be out of business quickly.
Your costs do NOT all go away simply because the airplanes are grounded. Most airliners lease their aircraft.
however....
If you sell tickets slightly below cost, you can survive for awhile by burning your cash reserves. If you have more cash reserves than your competitors you'll be able to outlast them. After more airliners go out of business and competition decreases then prices can be raised so the few remaining airline companies can start making a profit.
It's a dirty way to survive.
Posted: Tue Jun 17, 2008 9:47 pm Post subject: Re: Airline Bankruptcy/Merger Thread
cube wrote:
If you sell tickets slightly below cost, you can survive for awhile by burning your cash reserves. If you have more cash reserves than your competitors you'll be able to outlast them.
The winner is not, necessarily, "he who has the biggest cashpile to burn". Rather, it is "he who is has the biggest political clout for big bailouts".
As far as I can tell, this is the point of this latest spate of mergers. Delta-Northwest is hoping to be too big to be allowed to fail, with seven hubs (jobs in 8 states), while we might have accepted either of them going BK individually. _________________ At 1% annual growth, human bodies will incorporate every gram in the observable universe in approximately 10,170 years.
Posted: Tue Jun 17, 2008 11:18 pm Post subject: Re: Airline Bankruptcy/Merger Thread
lawnchair wrote:
(...)
The winner is not, necessarily, "he who has the biggest cashpile to burn". Rather, it is "he who is has the biggest political clout for big bailouts".
(...)
The Alitalia case... _________________ anagami.net
... Without a decline in fuel prices, massive airline bankruptcies are almost certainly coming. About the only suspense is who will be in the White House when they hit. ...
A tepid outlook from the package delivery company is not a good sign, showing that high oil prices are starting to really squeeze corporate profits.
Quote:
Alan B. Graf, Jr., FedEx's executive vice president and chief financial officer said in a statement that the next year is expected to be "very difficult due to the weak U.S. economy and extremely high fuel prices."
FedEx is considered a bellwether for the economy.
Edited for correction. FedEx is not in negotiations for a merger with DHL.
My brother, a FedEx pilot, wrote me:
Quote:
No, that (FDX-DHL) was an old rumor.
What is occurring is the negotiations between UPS and DHL (Alstar) for
UPS to fly DHL's freight.
DHL is owned by the German Post Office.
_________________ About my avatar: Guess.
Last edited by PeakOiler on Thu Jul 03, 2008 5:13 pm; edited 1 time in total
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