We’ve said that if oil prices don’t retreat significantly before year end, airlines will be asking for bailiouts. One travel agent who is a wholesaler tells me that premium seats (business and first class) are seriously undersold. That’s a major blow in combination with skyrocketing fuel costs.
From Reuters (hat tip reader Saboor):
There will be “spectacular casualties” in the airline industry over the next 12 months, billionaire Richard Branson, the owner of Britain’s No. 2 long-haul airline Virgin Atlantic, was quoted as saying on Saturday.
The U.S. airline industry — including Virgin America — has been battered by soaring fuel costs that are pinching even the healthiest airlines.
“The financial state of the world is just about the worst I’ve ever known it,” Branson told The Times newspaper in an interview. “It’s getting perilously close to being worse than the 1990s.
“You have the perfect storm — you’ve not only got the banking crisis and the housing crisis, you’ve got the soaring fuel prices as well. One of the big American carriers will almost definitely go.”
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He left off one of the nails in the coffin; the ridiculous “theater of the absurd” that passes for airline security.
Given the choice between what we have now, and having jumbo jets crash into building in New York on a daily basis, I would choose the latter.
Anonymous, I agree with the security angle. I just took a trip and was left seething not just by the ridiculous circus that passes for security in US airports but by the airline itself. When lightning leaves you stranded 100 feet from the gate for 45 minutes, turn the damn TV back on.
Personally, I’ve perfected the art of avoiding 90% of the business trips I used to have to take. I say BK for all of them. New management couldn’t possible be any worse.
Won’t be any bailout money left if the airlines wait too long to get a piece of the action. Better get their requests in early.
While we’re on the subject of bailouts, I could use one myself. Just 300k or so should do. How do I submit a request to the FED?
I fully expect the most of the US airline industry and much of the trucking industry will be bankrupt by this time next year. We haven’t even begun to discuss the implications, although these issues have flickered across comments here at NC. Both of these issues could have more impact than our putative offensive Iran offensive (which won’t happen, but). Remember, our food supply is delivered just-in-time—or was.
Jojo: Just go to Mydiscountwindow.com. Its easy and it’s fast.
Perhaps those turboprops sitting in the Nevada desert need some dusting off?