Airline industry fears oil will go to $60 a barrel

[lovuian]

http://feeds.bignewsnetwork.com/?sid=1eec3e8c78cd98ac

Big News Network.com Tuesday 8th March, 2005 (UPI)

Airline executives, burdened by huge losses despite fair hikes and capacity cuts, fear oil prices may reach $60 a barrel, USA Today reports.

One consultant said his airline clients are running worst-case financial simulations to anticipate the effects.

Jet fuel accounts for major portion of airlines' operating expenses and oil prices have been rising all year, currently hovering at over $55 a barrel. Recent decisions by large airlines to raise fares by as much as $20 for a round trip won't cover the added costs in fuel prices, said consultant David Swierenga of Vienna, Va.


more...

repercussions of High Oil prices!!!

[benburch]

1. In less than a month, it will.

And there will be no turning back.

Bush has FUCKED us.

[jpak]

2. Just wait until he bombs Iran

:scared:

[BrklynLiberal]

3. No big deal. The govt will bail them out again.

[benburch]

4. I don't know if you noticed...

But the government bailout of the airline industry was a lie Bush told to make himself look good.

United tried for the last four years to get the first red cent out of that bailout.

[DemoTex]

5. Nope. That was a sham.

Bu$h will let United, US Airways, and Delta die on the vine. The benefactors will be the Texas airlines: American, Continental, and Southwest. It is all part of the master plan. If those three airlines can't bust their unions, they are history too. The next step is cabotage: foreign carriers flying domestic routes. The ultimate in out-sourcing. Bu$h craves that! He must have had some successful F-102 squadron mates who got on with the airlines (I know one who flew for EAL) that he wants to totally screw. My friend from high school, who served with Bu$h in TANG, is a Democrat who hates Bu$h's guts. Rick won't come forward because he knows the BFEE M.O. .. suicide. I don't blame him a bit. In fact, his name is not really "Rick." Hell-of-a-note, eh?


US Commander-in-Chief

[Wwagsthedog]

7. AGreed

However, only Southwest may be the only profitable airline left after the soot settles.

http://www.chron.com/cs/CDA/ssistory.mpl/business/3073629

With crude oil prices again running at more than $50, the promise of profits for the battered airline industry is even further away.

After labor, fuel is the second-costliest item for airlines. With oil reaching higher-than-expected prices, airline analysts are lowering forecasts.

"We now believe the industry will not turn a profit until 2007," Goldman Sachs airline analyst Glenn Engel said Monday in a report, noting that oil prices were running more than $5 above his first-quarter expectations.

Among the many money-losing airlines, Houston-based Continental has long been expected to be one of the first to return to profitability. But a continued rise in fuel prices could put the damper on that happening anytime soon.

<snip>

[DemoTex]

13. The only reason SW is profitable is their protected niche: Love Field.

[Nashyra]

15. Southwest had the cash to hedge fuel prices

they locked in fuel prices at a considerable lower rate through I believe 2007. It cost them alot of cash but they had it at the time.

[LeahD]

32. Flying only one type of airplane

also reduces their maintenance and training costs. If we want the other airlines to fly the SW model, we'll only be flying domestically. 737's can't do the long haul flights over the Atlantic and the Pacific.

[Bridget Burke]

34. And didn't Southwest's lobby stop talk about High Speed Trains?

The plan was to link Houston, Dallas & San Antonio with high speed trains. Zip from downtown to downtown instead of flying a sardine can from suburb to suburb (except for Love Field).

It was a good idea...

[The Velveteen Ocelot]

12. Cabotage has already started.

China has been given permission to fly cargo from ANC to ORD. It's just a matter of time before Bu$hit opens it up to foreign passenger carriers. How much you want to bet that during all that schoozing in Europe last week, Boy George didn't try to throw the EU a bone or two -- maybe in the form of cabotage rights -- if they agreed to help him get his sorry ass out of the Iraq mess?

[all.of.me]

6. my daughter is going to europe this summer

we have just been charged a $50 fuel surcharge by the airlines.....

at this point, i even wonder if the political climate in europe will be safe, nevermind the fuel prices!

[flygal]

20. Hi from Europe!

She should be fine if she has a rail pass. Gas here has always been high - but the thing that will really hurt is the dollar. She won't be able to buy as many souveniers - except the ones made in China of course :(

[all.of.me]

26. she is going with a group

and they have their own bus and driver. thanks for the tip on spending. she will have to watch what she buys. she is a Shopper with a capital S!

[Straight Shooter]

8. Only the rich, connected, and privileged are entitled to fly.

What's everyone so upset about? This is just the natural result of social Darwinism. Those who are savvy enough to remain wealthy will still be able to fly; they can afford any price charged.

The peons should be walking, anyway. It's very uppity to assume that someone who is not born into a great family like the bushes should deserve the benefits of modern transportation. God gave us feet for walking. Let the poor walk, as befits their lowly station in life.

'scuse me. I was just possessed by a freeper demon who took it to the limit. Oddly enough, he left my syntax and spelling skills intact.

[jmcgowanjm]

9. Our inability to process information is reaching an impressive level.

The airline industry is history.

tourism is next.

Somebody ought to bring this to the Democrats'
attention. America has a problem bigger than social security,
or the price of prescription drugs, or gay marriage. America
is heading into a situation in which it will no longer have
an economy.

http://www.kunstler.com/mags_diary13.html

The US is getting more desperate by the hour for cheap
oil

To bad our ancestors let Firestone and GM
tearup our light rail systems across the country.

"Everyone around the world is fully aware of the
desperate situation facing the US, except for poorly
informed Americans . . . . "

BANGALORE, India: Venezuelan President Hugo Chavez
on Monday accused the United States of planning to portray
his country as a security threat in order to capture its vast
oil reserves.

"We are just waiting for the United States to announce
next
that Venezuela has weapons of mass destruction,’’ Chavez
said in a speech in the southern Indian city of
Bangalore.

http://jang.com.pk/thenews/mar2005-daily/08-03-2005/world/w5.htm

Watch inventory levels tomorrow 10:30 E
If oil goes thru $55/ bbl we're there.

[Solon]

10. These industries are going to be in the junkheap literally...

In less than two years tops. There is no way in hell, without being subsidized by the government, that they can stay in business. Jet Airliners are fuel hogs, and that will bite them in the ass at the end of it. These airlines are constantly in the red, and soon we will lose half the industry, then by the end of two years, the only airplanes leaving the ground, world-wide, will be military.

[rfkrfk]

16. freeloading airlines, are headed to the scrapyard

Tax on jet fuel for international flight, zero, not a penny.
Tax on jet fuel for domestic flight, 4.3 cents.
Not a typo, just over four cents a gallon.

airlines like the idea of higher fuel taxes {but not on jet fuel}.
airlines like the idea of a new 50 cent tax on gasoline.

[The Velveteen Ocelot]

18. Um... Freeloading? Not so much.

According to ALPA, federal taxes and fees are sometimes as much as 40% of the price of a domestic ticket. There's a lot more than fuel taxes. https://crewroom.alpa.org/DesktopModules/ALPA_Documents/ALPA_DocumentsView.aspx?itemid=1229&ModuleId=1458&Tabid=73

[Fovea]

11. But yet, airlines are better than trains

according to the ** administrations latest 'budget.'

But I am sure we will piss taxpayer money into the friendly skies and hack the legs off Amtrak.

[The Velveteen Ocelot]

14. Amtrak should be funded, absolutely. We need trains.

But trains use fuel, too, so the profit margin there doesn't look so hot, either. And the government isn't pissing taxpayer money into the airlines. To the contrary, the airline industry is more heavily taxed than the tobacco or alcohol industries, purveyors of habits the government wants to *discourage.* If they want to encourage air travel, why does 25% of each ticket have to be paid back to the government in taxes? If you buy a ticket for $100, the airline gets only $75 of that, and these days the net revenue from the tickets purchased by whole planeload of passengers isn't even enough to buy the fuel for that flight.

[reprobate]

27. Re: Taxpayer money for airlines.

Ocelot, I think if you look at the actual infrastructure that it takes to keep a civil aviation industry going you'll see the "pissing taxpayer money into the airlines."

Airports, particularly the huge hubs, are frighteningly expensive to build and run. The costs fall not only on the federal, but also the state and local governments.

Then there is the FAA with its control towers, radar system, controllers, etc. All of which are necessary to run a civil aviation industry, and all of which are hugely expensive.

And there are other costs, like the infrastructure to transport the people to and from the airport. And the cost of NOAA for the meteorology necessary for the planes to fly safely. All costs to the taxpayer, but cost that most of us never think about.

While it's true that trains use fuel too, they are far more fuel efficient than aircraft, less liable to accidents and terraism, and have a much smaller necessary infrastructure.

In fact, if you wanted to build a good hi-speed rail system, you wouldn't use even diesel engines, but electric. And there is no reason to power them off the existing grid, which would just increase the grid requirements. A single small pebble bed reactor would provide a safe, and fairly clean power source for much of the regional needs of a national high-speed rail system.

The problem, of course, is that hi-speed rail has no constituency, except for the people, and we no longer have a say in national decisions. We don't pay the politician's campaign coffers, the corporations do.

To bad. This could have been a great country. Too late now.

[RPM]

29. funded and appropriated more money to expand

otherwise only the rich travel in 10 years...

[Fovea]

35. When you look at profit margins

you miss an important element of transit systems.

Historically, the ones that were profitable were ruinously expensive.
All others, without exception run with the grace of subsidy. Once subsidized competition enters the market, the 'free-market' competitor fails, unless it can privatize profits while making the cost as public as possible. Airlines are a particularly good example of subsidized profit.

out of your 100 bucks, 25% of which is taxes, the industry consumes resources from NOAA, NASA, FCC, FAA, Dept of Commerce, HSA, the military and others.

This does not even consider direct bailouts of companies both post 911 and before. Everyone who pays taxes pays for airlines, but we don't get free tickets.

As subsidized systems go, Amtrak is freakishly frugal, and would be even more so if we sprung for high speed rail coast to coast. It would employ the same folks who make highways, as well.

But that is too smart for the laissez faire raiders like **, and far too hard to siphon money off. If only David Gunn knew how to hide boodle, they would be beloved by **.

[msongs]

17. Congress will let them all declare BANKRUPTCY since they are not

getting into debt by using credit cards, just by using credit the old fashioned way: running up bills and not generating enough income to pay the bills (by raising fares to cover their actual costs).

corporate bk is good, personal bk is...............bad.

Msongs
www.msongs.com/liberaltshirts.htm

[moondust]

19. Don't worry. Mighty Mouse is here.

Bush Would Use Power of Persuasion to Raise Oil Supply
By KATHARINE Q. SEELYE

WAYNE, Mich., June 27, 2000 -- Gov. George W. Bush of Texas said today that if he was president, he would bring down gasoline prices through sheer force of personality, by creating enough political good will with oil-producing nations that they would increase their supply of crude.

"I would work with our friends in OPEC to convince them to open up the spigot, to increase the supply," Mr. Bush, the presumptive Republican candidate for president, told reporters here today. "Use the capital that my administration will earn, with the Kuwaitis or the Saudis, and convince them to open up the spigot."

http://www.nytimes.com/library/politics/camp/062800wh-bush.html

(on edit: Apologies to the real Mighty Mouse.)

[SoCalDem]

21. Unless we get another free trip to Tahiti, we plan to never fly again

It's just no fun, and who can afford to travel these days anyway :)

[pokercat999]

39. Tell me about it.

My wife "commutes" by air. She is "chairman's preferred" on US Airways and even with this "sainted" service she uses her car every time she is working within four hours drive from home. Her commute is only Monday out Thursday back. We have many thousands of free air miles but rarely use them. We have donated and given away to friends and family well over 300,000 thousand air miles, at only about 25K miles per coach ticket that's a lot of tickets! We gave away almost all of her remaining miles in preparation for the reported, impending US Airways liquidation last month.

[dbt]

22. Salvation For The Airline Industry Is At Hand!

Relax, CEOs. You can just paint all your shiny airliners WHITE and lease them out to whoever is flying the Chemtrail missions damn near 24/7 over a major portion of the Earth.

There's plenty of fuel for these spray missions and cost does not seem to be a factor. As a matter of observation, the spray sorties have increased dramatically since bu$hler's "re-election," so here's your salvation, boys! Whoever is gonna need some new planes pretty quick--and I betcha they'll be glad to take yours!

:evilgrin:

[Mr.Green93]

23. Now

can we have trains?

[greendeerslayer]

28. sorry, no...

...no money left for trains in the fed budget, the war on terra is the priority.

[BiggJawn]

24. That's OK, the Congress will bail them out.

Plenty of "loans" for these "essential services", but not one fucking greasy Peso for AMTRAK.....

I guess the rhetoric about the free market forces and companies need to thrive and die on their own only applies if you have steel wheels, not wings....

[98geoduck]

31. But they don't have Daschle to use for their lobby. I'm sure he'll be

,or has been, replaced. More subsidies for the rich...

[4dsc]

25. I've put off buying an SUV and a boat...

I don't think these gas prices are going down anytime soon. So I'll look into a smaller truck and perhaps buy a boat next year..

[Tracer]

30. Fare Hikes? I don't think so!

Fare reductions is more like it.

Huge full page adverts in the Boston Globe featuring the MOST INEXPENSIVE airfares that I've seen in a long time. And then a story about Jet Blue starting up a Boston-NYC shuttle for 100 bucks.

How they make any money at all is a mystery (and I guess they don't).

[Emboldened Chimp]

33. Well, time to cut pilot's pay again....

[LeahD]

36. Yes...

Continental's pilots have been in negotiations and will be voting on a pay cut. All financial woes can't be absorbed by employee groups.

[Blue_Tires]

37. hey airlines: still having money problems???

then CUT THOSE BLOATED CEO SALARY 'PACKAGES!!!!'

[Deja Q]

38. Try $100/barrel. $150/barrel... $200/barrel? It will happen once

peak oil is seen as being officially here and the decline begins.

[Fovea]

40. I think that for the near term

the ceiling is ~$70/bbl.
Above that, we start boiling tarsand after a brutal annexation
of Alberta.

at $60/bbl, we liberate Venezuela.

You cannot overestimate how low we will go to keep that suv on the road.

Oil and America, it's not just a dystopia, it's an apocalypse!