The Airline Industry and your predictions

[Pietrantonio]

Wondering what your predictions are on the airline industry both short and long term. With the cost of fuel constantly on the uprise, furloughs, and airlines that have and could potentially close, etc...I can't help but to wonder what is going to happen to the future of the airline industry. I see a lot of stats that mention airline travel increased 7% from 2006 (Just an example), and that the predictions of air travel are going stay on the rise.

What are your thoughts? Is there still a bright light at the end of the road for pilots and airline companies?

[surreal1221]

Bright Light.

Fares will increase, and guess what. . .load factors will remain consistent with year over year trends.

[RightSeatGirl]

The problem really isn't market demand. It's operating cost. Passenger travel despite an increasingly problematic economy is still increasing but so is cost. And the cost is increasing faster then the demand for services. The industry's economy can't keep up. So in all likelihood we'll be facing very significant reductions in capacity with the associated woes including staff reductions from the cockpit to the bag room. Airlines will have no choice, they will either have to scale back or go under. And this isn't in my opinion going to be temporary by any means. I really can't see it going any other way in light of the new oil economy.

[777forever]

Originally Posted by RightSeatGirl

The problem really isn't market demand. It's operating cost. Passenger travel despite an increasingly problematic economy is still increasing but so is cost. And the cost is increasing faster then the demand for services. The industry's economy can't keep up. So in all likelihood we'll be facing very significant reductions in capacity with the associated woes including staff reductions from the cockpit to the bag room. Airlines will have no choice, they will either have to scale back or go under. And this isn't in my opinion going to be temporary by any means. I really can't see it going any other way in light of the new oil economy.

Domestic scale back. Forecasts show international demand will remain steady. International ops is the pot of gold at the end of the rainbow.

[RightSeatGirl]

It's not an issue of demand. It's all about cost. If demand and cost increased at the same comparative rate, we have a mute issue. But when cost is increasing exponentially over demand we have an economic imbalance that can't be kept up with.

I'll simplify my point. If one passenger uses 1 gallon of jet A, you have a good one to one balance and you can price accordingly. But if for every passenger added, the cost of each gallon per passenger increases then you have a problem. So let's say every month you add one passenger, but every week, each gallon increases in cost by say 10%. Do you see where this is going?

That in a very simplified essence is what the industry is dealing with right now. So demand is pretty much irrelevant in light of the cost increase.

[Nick]

Originally Posted by 777forever

Domestic scale back. Forecasts show international demand will remain steady. International ops is the pot of gold at the end of the rainbow.

Yeah but you've got to get the passengers to their international flight. They don't all live at the hubs!

[777forever]

Originally Posted by Nick

Yeah but you've got to get the passengers to their international flight. They don't all live at the hubs!

Exactly, scale domestic back to the point that they are hub feeders for international flights.

[RightSeatGirl]

Er...That's pretty much how domestic flying is already structured. No one flys outstation to outstation any more. In fact I may be wrong, but I'm not sure if any of the legacy airlines ever really did.

[SpiraMirabilis]

I think that Bombardier is going to sell a lot more Q-400s. I think there is going to be a significent change in the types of airframes regional airlines purchase from this point forward. Why did they buy the first regional jets in the first place? Because they were faster? Because the maintenance is cheaper on turbofans? Maybe is a factor but in my opinion (albeit one that may very well be ignorant) it had a lot to do with the fact that the American public didn't like flying on "dinky little prop" planes.
We're going to see I think larger RJs like the CR7 and CR9 whose economies make more sense and more turboprops where the airline is going to realize they can't afford to placate the dumb passenger's fear of a turboprop airplane. I really like the turboprop idea but I think we have to be pretty careful with the larger "regional jet" idea -- it wouldn't be far from a CRJ1000 or E-170 to a A320 under a regional airline which would be a disaster.

[GalaxyIFE]

Ummm, hello?! Did you not get the memo?!? I know it has been posted on here at least 14 times in the last 24 hours....

Well, since you didn't, here is the deal........

The sky is falling!!!!!!!






































Yes...

Actually, I do think like the rest of the economy, there is going to be continued "correction". How much? Who knows. What is the GNP going to do? What is the dollar going to do? How many more high paying jobs will be outsourced? How many kids are you going to have? How old will we all live to be? A simple point...there are way too many variables to determine even (in my opinion) a somewhat realistic prediction. The stats say it all...47% of all statistics are made up on the spot (including this one).

As has been said before: Plan for the worst and hope for the best...ESPECIALLY in aviation!!!

[RightSeatGirl]

If a regional aircraft gets much bigger then a 90 seat regional jet it won't be a regional jet any longer. And it would seem that a trend towards more T-props will start showing it's face but that would actually make sense. And well, making sense is something that airlines rarely do.

[B767Driver]

Originally Posted by Pietrantonio

Wondering what your predictions are on the airline industry both short and long term. With the cost of fuel constantly on the uprise, furloughs, and airlines that have and could potentially close, etc...I can't help but to wonder what is going to happen to the future of the airline industry. I see a lot of stats that mention airline travel increased 7% from 2006 (Just an example), and that the predictions of air travel are going stay on the rise.

What are your thoughts? Is there still a bright light at the end of the road for pilots and airline companies?

You could have made this post in the 70's, 80's and the early 90's. Probably will look a lot like it does today with various companies coming and going.

[surreal1221]

Originally Posted by RightSeatGirl

If a regional aircraft gets much bigger then a 90 seat regional jet it won't be a regional jet any longer. And it would seem that a trend towards more T-props will start showing it's face but that would actually make sense. And well, making sense is something that airlines rarely do.

In regards to 90 seat jets, well. . .let's just hope our mainline comrades stick by their current scope clauses.

[JeffGreeley]

My prediction is that the industry will significantly worsen over the next decade or two, due in part to the rising costs of fossil fuels. But as soon as the next generation of ultra-fuel efficient propulsion technology has significant market penetration, operating costs will finally decrease. This will allow the airlines to lower airfare, which in turn will attract more customers, and yield higher profits. Welcome to the golden age of commercial aviation.

[Itchy]

Any of these predictions are worth what you paid for them.
Here is mine. Sometime in the future, we as a country will start to evolve a cohesive energy policy, (that does not include secret meetings at the whitehouse with oil executives) that will include a *greatly* increased railroad infrastructure. (high speed trains, electrically powered) More nuclear power plants will sooner or later be required. Oil will go up significantly from where it is now.

Two decades from now, most domestic flying will be in advanced turboprops. And it will be very pricey, and greatly reduced.


Sooner or later the realities of a limited resource will force realignment of everything. How soon and when, no one really knows. But- I firmly believe that what aviation looks like today will be vastly different in 15 or so years.


Or maybe not.

[mtsu_av8er]

Nobody wants to admit it, but I can predict exactly what will happen.

Every single person involved with the industry is going to die. Every person. So will their families, pets, and neighbors.

I hate to bring the bad news, but it's true.

[holyshirt]

Originally Posted by Itchy

Any of these predictions are worth what you paid for them.
Here is mine. Sometime in the future, we as a country will start to evolve a cohesive energy policy, (that does not include secret meetings at the whitehouse with oil executives) that will include a *greatly* increased railroad infrastructure. (high speed trains, electrically powered) More nuclear power plants will sooner or later be required. Oil will go up significantly from where it is now.

Two decades from now, most domestic flying will be in advanced turboprops. And it will be very pricey, and greatly reduced.


Sooner or later the realities of a limited resource will force realignment of everything. How soon and when, no one really knows. But- I firmly believe that what aviation looks like today will be vastly different in 15 or so years.


Or maybe not.

I want to agree with your outlook... I just hope we get the right leaders in office to develop a new energy plan. We really have to start getting off of oil thats the bottom line. Oil is relatively inelastic so theoretically, oil companies could charge whatever they want and know we need it to survive (as a whole).

[RightSeatGirl]

I too would agree that Itchy's forecast has some merit to it. Hell, already today we have advanced diesel electric locomotives that literally get over 300 miles per one gallon of fuel. But rail has bigger limitations then air travel and I don't see it as a replacement for pax travel. Because as you said you would have to build the infrastructure. And even interconnecting existing rail lines to provide high speed pax service to the same number of cities and towns that have scheduled air carrier service today would be a monumental undertaking vs creating new pax lines altogether.

[TexasFlyer]

If anyone gets their prediction right, contact me. I could use your talent in predicting which stocks to buy where I can turn $100k into $1,000,000 in a short 6 months. And then turn it into $1,000,000,000 over the next 30 years.

[ComplexHiAv8r]

Originally Posted by TexasFlyer

If anyone gets their prediction right, contact me. I could use your talent in predicting which stocks to buy where I can turn $100k into $1,000,000 in a short 6 months. And then turn it into $1,000,000,000 over the next 30 years.

I can help you turn $1,000,000 into $100,000 in 6 months if you need that service!

[wheelsup]

Originally Posted by TexasFlyer

If anyone gets their prediction right, contact me. I could use your talent in predicting which stocks to buy where I can turn $100k into $1,000,000 in a short 6 months. And then turn it into $1,000,000,000 over the next 30 years.

Just short the ones I buy...

[pilotty]

Don't Believe the Hype

[Sprint100]

Originally Posted by mtsu_av8er

Nobody wants to admit it, but I can predict exactly what will happen.

Every single person involved with the industry is going to die. Every person. So will their families, pets, and neighbors.

I hate to bring the bad news, but it's true.

Now with that said as Eddie Murphy eloquently put it we should all just have a coke and smile and...........

[typhoonpilot]

Originally Posted by Pietrantonio

Wondering what your predictions are on the airline industry both short and long term. With the cost of fuel constantly on the uprise, furloughs, and airlines that have and could potentially close, etc...I can't help but to wonder what is going to happen to the future of the airline industry. I see a lot of stats that mention airline travel increased 7% from 2006 (Just an example), and that the predictions of air travel are going stay on the rise.

What are your thoughts? Is there still a bright light at the end of the road for pilots and airline companies?

The regionals will trend towards larger jets and/or turboprops. They will continue to replace the domestic portion of their partner's flying.

The majors will reduce domestic capacity, see above, in favor of international routes.

Corporations and the rich will keep expanding their use of private aircraft. Although this one area could be adversely affected by high cost of Jet-A.

With open skies coming to the USA one or more of the Legacy carriers will be unable to compete and be forced to merge or liquidate. Open skies starts March 30th, 2008. Phase II will be even more interesting as cabotage is certainly going to be on the table.

If you want to fly pax then you will have to choose the major you fly for wisely. The competition to Europe is going to be fierce so the airlines with more of their operation in the Pacific and South America will do better. Look for Southernjets to really get hurt with open skies. They desperately need the NWA Asian route structure to be a viable airline going forward.

If you want a good airline job then look to Fedex and UPS as the best career option.


Typhoonpilot

[HercDriver130]

What he said..... In the long term... the so called regionals we be the vast majority of the domestic feed for Legacy carriers..... its what they have wanted all along..... and they just might get it.