Airline Industry in Turmoil with over $100/barrel Oil

[gijoe]

First it was Spanair a couple of weeks ago and now it is Malev. The Malev aircraft in Dublin Airport was seized this morning triggering the collapse of the airline. All Malev's 22 strong fleet was leased as was most of Spanair's 26. Another common feature of both airlines is that they had a large number of fuel inefficient older generation aircraft in their fleets including Boeing 737-600's and MD-82's.

BBC News - Hungarian airline Malev collapses

Also in the news today is that Air India have not been paying their fuel bills.
BBC News - Air India asked to pay fuel bill as firms cut supplies

India's second biggest airline Kingfisher Airlines has also had well documented problems and have surrendered some of their fleet to lessors.

Tony Fernandes' Air Asia X have also recently cut their budget flights from Malaysia to Europe.

And American Airlines which is in bankruptcy annoucned yesterday that it is going to lay of 13000 and shed their fuel guzzling leased McDonnell Douglas fleet.

The airline industry is going to go through some shakeout with sustained $100/barrel oil.

[seanmacc]

The American Airlines thing is a bit different. They're just filing for bankruptcy so they can lay off their staff and rehire them in worse conditions. Its a union destroying exercise.

[Luachara]

There is an alternative. They can make fuel from cheap shale gas.

[Spanner Island]

The airline industry is relentless... which is why it's no place for unions - because unions seem to think whenever they agree to and implement an agreement, they can then sit on their arses for a few years until the next crisis.

The reality however is that unions need to continuously adapt on an ongoing basis, or better still, be booted out of the airline industry altogether.

I think we've seen an end to the kind of low fares we got used to during the late 90's and early 00's.

They won't be back unless and until a brand new fuel is developed...

And there'll be plenty of airlines going bust in the meantime.

[gijoe]

The American Airlines thing is a bit different. They're just filing for bankruptcy so they can lay off their staff and rehire them in worse conditions. Its a union destroying exercise.

They are shedding 13,000 as well. Its not just about contracts. They also prior to bankruptcy made the biggest order for aircraft ever taking 460 short-haul aircraft from both Boeing and Airbus while shedding their leased MD-82 and 83's in the bankruptcy process.

BBC News - American Airlines announces 13,000 job cuts

[Partizan]

The airline industry is relentless... which is why it's no place for unions - because unions seem to think whenever they agree to and implement an agreement, they can then sit on their arses for a few years until the next crisis.

The reality however is that unions need to continuously adapt on an ongoing basis, or better still, be booted out of the airline industry altogether.

I think we've seen an end to the kind of low fares we got used to during the late 90's and early 00's.

They won't be back unless and until a brand new fuel is developed...

And there'll be plenty of airlines going bust in the meantime.

Yes its the unions fault that airlines were run into the ground by incompetent overpaid and overpampered executives.

[PAD1OH]

maybe the sector shouldn't have been so heavily subsidised in the first place.

The subsidisation led to unsustainable businesses models from a number of perspectives.

[Spanner Island]

Yes its the unions fault that airlines were run into the ground by incompetent overpaid and overpampered executives.

Glad to see you're learning...

[Partizan]

Glad to see you're learning...

Sarcasm alert

[Spanner Island]

maybe the sector shouldn't have been so heavily subsidised in the first place.

The subsidisation led to unsustainable businesses models from a number of perspectives.

Many of them remain subsidised in ways...

Why hasn't France got any significant Low Fares airline? French courts have conspired to keep them out and allow Air France to dominate.

Why was Alitalia subsidised by the Italian government for years after deregulation? The EC were more concerned about pursuing every complaint made by the legacy airlines against Ryanair while turning a blind eye to what was happening at Alitalia...

The EC has turned so many blind eyes to flouting various rules and regulations in the European airline industry over the years that consolidation hasn't happened to the extent it should have.