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Airline Industry: Set To Fail? Or Just A Bump?  
User currently offlineParisl From United States of America, joined May 2008, 15 posts, RR: 0
Posted (6 years 1 month 4 days 6 hours ago) and read 4909 times:

With the Industry doing as bad as it is right now, is it set to fail, or is it just a bumpy road for now?

Would it be a good idea for someone to go into pilot school in the next 2 years, or try and find something else?

What do you think?

25 replies: All unread, showing first 25:
 
User currently offlineWeb From United States of America, joined Jun 2005, 427 posts, RR: 0
Reply 1, posted (6 years 1 month 4 days 5 hours ago) and read 4875 times:

I think this is an important time for airlines (and the world in general) because it forces efficiency. People are finally realizing how wasteful and inefficient current energy usage is, which applies to everything from one's window air conditioner to aircraft burning through thousands of gallons of fuel per day. For anything to get better it has to first get worse, and right now we are getting into the "worse" part until efficiency gains are realized and energy-dependent industries recover. Things will probably look very different in the near future than they do now, but it will be for the better. Although this does mean the end is near for such beloved, yet inefficient, aircraft as the DC-9, these new times are exciting as they usher in such promising planes such as the 787. In reality, it's the hard times such as now that catalyze progress, which for the airline industry means significant, yet beneficial, changes.

As for entering the piloting workforce, there will always be demand for air travel, and as the baby boomers retire there will be significant need for new pilots, especially when coupled with rapid economic growth around the world. I for one will be among those eager pilots vying for a right seat spot in the near future. In short, if you really love aviation, you can't be a fair-weather fan.



Next flight: GRR-ORD-PDX-SEA-ORD-GRR
User currently offlineCrewchief From , joined Dec 1969, posts, RR:
Reply 2, posted (6 years 1 month 4 days 5 hours ago) and read 4858 times:

I think predicting that the entire industry will fail is a bit over the top. Yes, certain carriers are definitely at risk of failure, perhaps even liquidation. But people still have a need to communicate, and a need to be physically close to others. So I think the present situation is the beginning of some hard times, but we'll get through them.

User currently offlineSpacecadet From United States of America, joined Sep 2001, 3611 posts, RR: 12
Reply 3, posted (6 years 1 month 4 days 5 hours ago) and read 4846 times:

It's definitely a bad time to be going into pilot school.

People always get caught up in thinking things will only grow, and that the way things are is the way things will always be, only they'll just keep getting bigger and better.

That doesn't always happen. I am not convinced that the commercial airline industry (and that includes Boeing and Airbus) is going to be able to adapt quickly enough to what I *am* convinced is a permanent increase - and permanently increasing - rise in the cost of oil. I mean there are literally going to need to be new airplanes using new methods of propulsion. And they are going to need to be developed within the next 4-5 years to save most domestic airlines, and they are going to need to be more economical than airplanes that burn oil products. I don't see this happening.

The industry is going to contract, and probably pretty dramatically. And all those laid-off pilots are going to be out there looking for work. They are experienced; someone just out of flight school isn't. They'll be desperate too, eventually, meaning at least some of them will probably settle for pay that's lower than their experience would otherwise garner them. So you'll be competing with thousands of pilots with 20-30 years of experience.

I doubt the industry is going to die. But it will come out of this smaller; people will be flying less, and there will be fewer airlines. It's going to take a while for the industry to reach a state of equilibrium - really it can't even happen until oil at least sort of stabilizes. It's a moving target right now, so nobody even knows how much they really need to cut.

It's a bad time to want to break into the industry.



I'm tired of being a wanna-be league bowler. I wanna be a league bowler!
User currently offlineParisl From United States of America, joined May 2008, 15 posts, RR: 0
Reply 4, posted (6 years 1 month 4 days 5 hours ago) and read 4827 times:



Quoting Spacecadet (Reply 3):
It's a bad time to want to break into the industry.

But with Web's reply:

Quoting Web (Reply 1):
As for entering the piloting workforce, there will always be demand for air travel, and as the baby boomers retire there will be significant need for new pilots

Do you think it will help to try and get hired. If you think about it I have at least 6 years before I enter the workforce, do you think things will be better than, at least where I can get a job?


User currently offlineDeltaGuy From , joined Dec 1969, posts, RR:
Reply 5, posted (6 years 1 month 4 days 4 hours ago) and read 4761 times:



Quoting Web (Reply 1):
In short, if you really love aviation, you can't be a fair-weather fan.

That should be a banner slogan on this site. People seem to forget it alot.

DeltaGuy


User currently offlineRcardinale From United States of America, joined Nov 2005, 190 posts, RR: 0
Reply 6, posted (6 years 1 month 4 days 4 hours ago) and read 4757 times:



Quoting Web (Reply 1):
if you really love aviation, you can't be a fair-weather fan

Thats exactly what i think! I'll be applying to college this fall for aviation and honestly it may be a bad time for the industry but I'm gonna give it my best shot and I can only see what happens but I cant see myself doing something else. If you know that aviation is for you then go for it it your not sure at this point, weigh your options and you will decide in the end.


User currently offlineSurprise From United States of America, joined Jun 2008, 133 posts, RR: 1
Reply 7, posted (6 years 1 month 4 days 4 hours ago) and read 4736 times:

Man, if you want to fly do it! People who love their work always find a way to keep working. When I was hired I was told "You will never get any benifits, you will never be full time and you are subject to being let go at any time". That was 13 years and several promotions ago. If you want it go for it.

On another note, think about helicopters. The market is wide open for those pilots as most of the current ones are Nam vets who are retiring. My son just got his license and has several great job offers.


User currently offlineExaauadl From , joined Dec 1969, posts, RR:
Reply 8, posted (6 years 1 month 4 days 4 hours ago) and read 4714 times:



Quoting Web (Reply 1):
I think this is an important time for airlines (and the world in general) because it forces efficiency. People are finally realizing how wasteful and inefficient current energy usage is, which applies to everything from one's window air conditioner to aircraft burning through thousands of gallons of fuel per day.

wasteful and inefficient is a relative term.

Quoting Spacecadet (Reply 3):
I *am* convinced is a permanent increase - and permanently increasing - rise in the cost of oil. I mean there are literally going to need to be new airplanes using new methods of propulsion. And they are going to need to be developed within the next 4-5 years to save most domestic airlines, and they are going to need to be more economical than airplanes that burn oil products. I don't see this happening.

Your Malthusian belief in peak oil is well know around here. The idea that alternative substitues for jetfuel will be developed in 4-5 years is absurd. It isnt going to happen.


User currently offlineMileHighFlyer From Canada, joined Feb 2008, 55 posts, RR: 0
Reply 9, posted (6 years 1 month 4 days 3 hours ago) and read 4674 times:

I think people who want to pursue aviation as a career should always have a backup. Aviation is a very cyclical industry and has its peaks and valleys. Those who only know how to fly planes could be left jobless as soon as the industry goes sour and its hard to apply your pilot skills to any other industry other than aviation.

User currently offlineCloudy From , joined Dec 1969, posts, RR:
Reply 10, posted (6 years 1 month 4 days 3 hours ago) and read 4613 times:



Quoting Surprise (Reply 7):
On another note, think about helicopters. The market is wide open for those pilots as most of the current ones are Nam vets who are retiring. My son just got his license and has several great job offers.

However, helicopters are gas hogs. A lot of jobs currently done by helicopters may be done by fixed wing aircraft and autogyros - since these use a heck of a lot less fuel. They also are easier to fly and maintain. Most current helicopter jobs could be done by STOL aircraft or autogyros. There will always be a place for helicopters, but unless fuel prices go way down they will occupy a smaller niche.

Quoting MileHighFlyer (Reply 9):
Those who only know how to fly planes could be left jobless as soon as the industry goes sour and its hard to apply your pilot skills to any other industry other than aviation.

However, AF&P mechanics are in demand by all sorts of industries outside of aviation. Also, the fact that one has the dedication and willpower to become a commercial airline pilot says something about a person's character and intelligence. I'm sure there are many employers that realize that.

Quoting Exaauadl (Reply 8):
Your Malthusian belief in peak oil is well know around here. The idea that alternative substitues for jetfuel will be developed in 4-5 years is absurd. It isnt going to happen.

There is something out called SwiftFuel - http://www.swiftenterprises.com/Swift%20Fuel.html
This is being offered as a replacement for avgas, and if it works out it could save non-turbine powered general aviation. It does not replace jetfuel, but its makers claim to be working on something that does. Jet fuel is essentially Keroseen. It is not much different from diesel fuel. We have a reasonably-sized biodiesel industry. It is small compared to the petroleum industry but it is big enough to serve as a platform for rapid growth. If petroluem-based diesel gets even more expensive we will have biologically based Jetfuel as well.

Of course, the main problem with biofuels is that currently the precursor crops are in demand for food use as well. There is a such thing as "cellulosic" biofuel, which relies on switchgrass(which can be grown anywhere) or the innedible parts of conventional crops. That is probably at least 5 years away from widespread use however, since there really is no significant current production to serve as a base.

Bottom line is - given the neccesity of air transport, society will come up with something. There will be more efficient aircraft and alternative fuels, as well as more petroleum from places that are currently off limits. As long as oil costs more then $100 - the supply of petroleum or a reasonable alternative is all but assured for the foreseable future. Malthus was wrong because he forgot that neccesity is the mother of invention, and that is still the case today. You are correct that the transition may be difficult, however. The industry could shrink by 50% or more only to bounce back when the market decides on a solution.


User currently offlineRwex414 From United States of America, joined May 2008, 82 posts, RR: 0
Reply 11, posted (6 years 1 month 3 days 21 hours ago) and read 4470 times:



Quoting Parisl (Reply 4):
If you think about it I have at least 6 years before I enter the workforce, do you think things will be better than, at least where I can get a job?

Anyone know the answer to this?


User currently offlineSPR773 From India, joined Jun 2008, 158 posts, RR: 0
Reply 12, posted (6 years 1 month 3 days 21 hours ago) and read 4435 times:

Quoting Parisl (Thread starter):

Whatever line you choose my friend if you really enjoy doing that , then thats the right line for you....well predicting the failure of the airline industry is very very pessimistic....if you love to fly and you are able to get a chance go ahead and do it...if you really love it , if it is your passion you will reap its benefits....it will not be "loss making" for you at any time....
If I were you I would kill for a chance to fly an airplane, but somehow I could not make it to pilots' school , but if you can go ahead....enjoy......
my humble

[Edited 2008-06-29 21:57:57]

User currently offline6thfreedom From Bermuda, joined Sep 2004, 3323 posts, RR: 20
Reply 13, posted (6 years 1 month 3 days 20 hours ago) and read 4395 times:

Asian finanacial crisis 1997/98
September 11 2001
SARS 2003
Iraq/Terrorism 2003-2006


I think it's fair to say that while there will always be shocks and slow downs, the market will continue to increase.

People are becoming more mobile than ever before, and with over a third of the worlds population (India and China) having more opportunity to fly, I don't see the industry shutting down any time soon..


User currently offlineBabybus From , joined Dec 1969, posts, RR:
Reply 14, posted (6 years 1 month 3 days 19 hours ago) and read 4366 times:



Quoting 6thfreedom (Reply 13):
People are becoming more mobile than ever before

This is due to the cheap airfares on offer. Once fares go up the number of pax will drop. Most travel these days is VFR. Hence the popularity of LCC's.

If the theory is true that travel is expanding in China and India we should see some massive aircraft orders coming out of those countries.

In Europe I think we will see a contraction of air travel journeys for the next few years.


User currently offlinePa747sp From Australia, joined Jan 2008, 222 posts, RR: 0
Reply 15, posted (6 years 1 month 3 days 18 hours ago) and read 4316 times:

Generally speaking, the airline industry is not a great employer. Low margins, low profits means that, as an employer, airlines aren't great.

THe current downturn is a classic case for the airlines. They sell tickets up to a year before a flight. That means that if the operating cost of a flight goes up, there is little they can do to generate more revenue on that flight. Airlines therefore are very sensitive to any cost changes.

That said, after each shakedown there is always a period of relative profitability, where the industry manages to get back into a situation where competition is down, costs stabilise and demand strengthens.

So the airline industry is cyclic, and, as such, it is not one that you can look at as a stable, long-term employment prospect. However, if it is your passion, and you can either be careful with the money you do earn it it, or develop some side-line business that might see you through the lean times.



Nothing seems as good since the VC10.
User currently offlineCurmudgeon From Australia, joined Oct 2006, 695 posts, RR: 22
Reply 16, posted (6 years 1 month 3 days 17 hours ago) and read 4278 times:

The temptation is to say "go for it" and enter pilot school. From my vantage point of almost forty years experience and quite a few recessions behind me, (and the prototype fuel crisis too, in '74) I would counsel against it. Unless you are willing to become an expatriate and leave the U.S. for the bulk of your career.

(I say this because I believe that the U.S. will have ample pilots for a long time to come, and I believe that demand is shrinking. My crystal ball is no better than yours, but I don't see any real downward pressure on oil prices anywhere. The pundits and analysts that I read are split about 80:20 against any meaningful price drop anytime soon.

The industry as a whole is buying about a billion barrels of fuel annually. A simple $1.00 jump in price means...a billion more cost. Much of the recent price spikes have yet to show up on the balance sheets owing to hedging against price, hedging that is quickly running out for everybody.

Here's my big worry: In recessions and downturns before now, demand for oil eased as the economy slowed. That caused a price decrease, which still allowed the average person to continue to use oil at high rates. This time its different: demand from China and India is keeping oil prices high (along with speculation and other 'factors'). As the economy slows, prices remain high, and discretionary spending is cut. Air travel for most people falls into this category.

I believe that when we in the industry speak of industry trends we are thinking of two industries: The U.S., and Rest of the World. The U.S. carriers, historic leaders and pioneers, are all moribund. Old fleets, legacy cost structures, empty coffers. How will the U.S. carriers respond to the challenges? Mergers, fleet rationalisations, downsizing. Managers don't really have many strategies on the cost side left, and revenue I think will be flat or falling. So, if you want to fly, you need to ask yourself how much you'll miss home.

I see that executive jet orders have blown way out lately. Maybe the future of aviation is in either a G-V or an A380*. Might be a lot fewer airplanes in between in the future.

*I mean any modern, fuel efficient airliner, not just the 380.



Jets are for kids
User currently offlineArt From United Kingdom, joined Feb 2005, 3381 posts, RR: 0
Reply 17, posted (6 years 1 month 3 days 16 hours ago) and read 4218 times:



Quoting Curmudgeon (Reply 16):
Here's my big worry: In recessions and downturns before now, demand for oil eased as the economy slowed. That caused a price decrease, which still allowed the average person to continue to use oil at high rates. This time its different: demand from China and India is keeping oil prices high (along with speculation and other 'factors')

Demand may continue to rise from China and India but what is different this time IMO is that the price of crude has risen so much over the last couple of years that a lot of crude that was left in the ground at $30-$50 a barrel is now exploitable commercially. Of course it will take time to get that extra oil out of the ground. If production increases faster than demand over the next few years, the price should stabilise or fall, shouldn't it?

The other moderating factor in the medium/long term is that biofuel may become a much more commercially viable alternative even with much higher raw material prices.


User currently offlineCandid76 From United Kingdom, joined Apr 2005, 733 posts, RR: 4
Reply 18, posted (6 years 1 month 3 days 13 hours ago) and read 4091 times:



Quoting Pa747sp (Reply 15):
Generally speaking, the airline industry is not a great employer. Low margins, low profits means that, as an employer, airlines aren't great

So why fly for an airline? The airline industry may be seriously struggling but the executive charter market is struggling to cope with demand. In the US more than elsewhere, as airlines drop routes then the demand for air taxis such as VLJs (very light jets) will increase and it is very noticable that business jet orders are higher than ever.

So if you love flying, why not go down that route?


User currently offlineRamzi From Canada, joined Oct 2006, 535 posts, RR: 0
Reply 19, posted (6 years 1 month 3 days 11 hours ago) and read 4015 times:

Does anyone have an estimate of the total backlog for Boeing and Airbus? If you consider that, I think you can pretty much be sure there is a future for aviation, at least for the next 20 or so years. The Airlines ordering the aircraft have a staff that is much more knowledgeable than any of us in this matter, if all the airlines, or well a big number of them, are still ordering aircraft at such massive rates, I think its safe to say we'll all be flying for a while...


There will come a time when you believe everything is finished - that will be the beginning.
User currently offlineIsitsafenow From United States of America, joined Feb 2004, 4984 posts, RR: 24
Reply 20, posted (6 years 1 month 3 days 10 hours ago) and read 3974 times:

Bump of fail? I would say closer to fail...at least in the USA. What needs to be done is development of more fuel efficient lighter engines.
We are heading to $5.00 per gallon....and there is nothing good about that if you run an airline or airfreight business..
safe



If two people agree on EVERYTHING, then one isn't necessary.
User currently offlineSanjet From Canada, joined Mar 2005, 180 posts, RR: 0
Reply 21, posted (6 years 1 month 3 days 10 hours ago) and read 3919 times:



Quoting Ramzi (Reply 19):

Sadly, boeing and airbus are expecting order cancelations because of fuel prices. Kingfisher recently canceled a 60+ A320 order last week with airbus.



Will Fly For Food!
User currently offlineAtpcliff From United States of America, joined Jun 2001, 181 posts, RR: 0
Reply 22, posted (6 years 1 month 3 days 2 hours ago) and read 3791 times:

Hi!

By 2017, the US Air Force will use a non-oil based jet fuel for ALL domestic operations.

Energy change is coming, but it will be rough.

I just heard the quote on TV today: "For every driver in the US who will quit driving, their are 10 in Brasil/China/India who will start driving."

The US aviation industry is not doing great.

However, as the above auto statement points out, globally there is and will be an even greater shortage of pilots in the future, due to all the Asians who want to fly.

cliff
KYIP



TRY. It's all you have control over, and it's what God wants.
User currently offlineAcidradio From United States of America, joined Mar 2001, 1874 posts, RR: 10
Reply 23, posted (6 years 1 month 2 days 18 hours ago) and read 3695 times:
AIRLINERS.NET CREW
FORUM MODERATOR



Quoting MileHighFlyer (Reply 9):
I think people who want to pursue aviation as a career should always have a backup. Aviation is a very cyclical industry and has its peaks and valleys. Those who only know how to fly planes could be left jobless as soon as the industry goes sour and its hard to apply your pilot skills to any other industry other than aviation.

This is very true. My dad had a classmate in law school back in the 1970's who flew for DL. He told my dad that one of the reasons he wanted to pursue a law degree was in case he ever experienced health issues and could not pass the FAA physical. Sadly, about six months after making this statement he was hit by a car and badly injured. I think he left flying after that, but he had his legal education to fall back on.



Ich haben zwei Platzspielen und ein Microphone
User currently offlineCurmudgeon From Australia, joined Oct 2006, 695 posts, RR: 22
Reply 24, posted (6 years 1 month 2 days 18 hours ago) and read 3678 times:



Quoting Art (Reply 17):
Demand may continue to rise from China and India but what is different this time IMO is that the price of crude has risen so much over the last couple of years that a lot of crude that was left in the ground at $30-$50 a barrel is now exploitable commercially. Of course it will take time to get that extra oil out of the ground. If production increases faster than demand over the next few years, the price should stabilise or fall, shouldn't it?

I think the reality is that $140/bbl oil makes even the wackiest exploration/production schemes viable. The problem is that demand is growing faster than production, so price relief may not be available. Also note that the industry needs high prices to fund higher production. I wonder too how keen OPEC will be (despite their rhetoric) to see prices fall. Whatever movement there will be incremental according to those people that I read on the subject.

Quoting Art (Reply 17):
The other moderating factor in the medium/long term is that biofuel may become a much more commercially viable alternative even with much higher raw material prices.

As it stands right now, bio fuel is unethical and immoral...hunger, if not starvation, is a recent fact of life in many parts of the world because of A: higher cost of oil-based fertilisers and pesticides, and B: some part of the cereal crop diverted to the production of fuel. In a global protein shortage it simply wrong to let people go hungry so that some tw*t can fly to Majorca for a piss-up. I mean, really.



Jets are for kids
User currently offlineHAWK21M From India, joined Jan 2001, 31667 posts, RR: 56
Reply 25, posted (6 years 1 month 2 days 15 hours ago) and read 3645 times:

Out here....Currently only Cargo Airlines are making a profit.
High salaries,lower priced tickets,Raised Parking & Landing charges coupled by high ATF costs are making things very difficult.
regds
MEL



Think of the brighter side!
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