Thursday February 16, 2012

JAPAN NEWS AND DISCUSSION

World airlines see blue skies ahead

Travel Mar. 12, 2010 - 03:03AM JST ( 7 )

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sf2kMar. 12, 2010 - 06:46AM JST

“Oil is a wild card,” Bisignani conceded.

Speaking on industry developments, he noted over 30 airlines were knocked out of business since the crisis began and that carriers have lost nearly $50 billion in the last decade. They now hold over $200 billion in debts.

Anything over $80 per barrel and the airline loses money even with fuel surcharges. Costs are too high at that point for travellers and other issues are multiplied throughout. Shaky at best and hardly blue skies ahead with such industry failure. What about that debt?

Expect more. With Peak Oil, airlines are the mechanical canaries in a worldwide coal mine, as there is nothing that can replace jetfuel. Rapeseed oil isn't going to cover it.

So yeah I do expect more blue skies ahead, fewer planes.

As the supplies dwindle costs will force new mergers, then when mergers are done we'll see more requests for gov't bailouts. Then as airlines no longer become economic expect more nationalised airlines just to keep the service available. Then as this spirals down fewer flights all around rationing occurs, then diminished airlines, then few if any, then gone.

It's all about the oil, and as it goes, so do airlines.

Airlines replaced ships back in the day and it looks like as we are falling down the energy ladder we'll be back to ships.
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bcbrownboyMar. 12, 2010 - 08:37AM JST

Stop on over to Ibaraki International Airport. I could use a direct flight to Paris.
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pawatanMar. 12, 2010 - 10:25AM JST

With Peak Oil, airlines are the mechanical canaries in a worldwide coal mine, as there is nothing that can replace jetfuel.

Largely true, but Peak Oil is still quite a ways off, despite what the alarmists say.
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sf2kMar. 12, 2010 - 11:05AM JST

yeah, when is the issue but it's like running up a downward escalator. The pressure if we do nothing means it goes down, but little discoveries here and there give us a little run up. But if we're still using more barrels than we're discovering, reality has to catch up to math at some point.

I'm thinking sooner rather than later. Either way, airlines are to be understood by us but not our grandchildren. It stops with us. Kids today will remember them, their kids will have no experience.
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pawatanMar. 12, 2010 - 12:05PM JST

I'm thinking sooner rather than later. Either way, airlines are to be understood by us but not our grandchildren. It stops with us. Kids today will remember them, their kids will have no experience.

I'm not sure - there's always new technologies. As the old saying goes 'necessity is the mother of invention' so as resources become methods of propulsion or new energy sources. Certainly 'reasonably' priced petroleum is a brake on innovation.

Either way the airline model is junk. Unlike almost any other industry they are as a group incapable of pricing a product appropriately to line up with demand and make a profit. It's hard to see blue skies ahead when all airline history shows that as an industry they seem to be incapable of thinking beyond the next quarter.
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sf2kMar. 12, 2010 - 01:42PM JST

yes I agree with much of what you're saying.

I saw a Cessna plane on TV running from a directional microwave truck antenna back in 1985 in Ottawa, but I guess necessity will have to unravel that one again.

For the size and breath of the airline industry, hundreds/thousands of flights a day, to suddenly swap out and use any solution will just not scale. That goes with any oil replacement. We will realize too late just how special a time we lived in.

Like you say, it's barely a model now, how can it be in an energy crisis? Sailing ships at least for cargo will go around. But again scale, the ships will have to be smaller, more crews, more processing. Quite a different world that we chucked over the side will leap back at us. We've paved over/condo-ised our waterfront. We're going to need those shores wharfs and piers as workplaces again.

For Japan trains can still be the main route. I'm thinking more Australia and New Zealand may both continue it in spite of losses such that they might have to keep planes going just to be connected.
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sf2kMar. 12, 2010 - 01:48PM JST

I should point out I'm not doom and gloom nor a "cornucopian" techno fix will save us kind of person, but somewhere in between. We'll make lemonade and not be so glib with our lives again.

Watching an industry collapse provides important lessons.