INDEX - TRANSPORTATION
SUBJECT: AIRLINES COLLAPSE
SOURCE: DAVID WARD firstname.lastname@example.org
POSTED: 3 MAY 2008 - 6:30am HST
Peak oil crisis: The half-life for US air travel
image above: a quaint loo back at thenever built American SST program. We were smart to get out.
by Tom Whipple on 1 May 2008 in The Falls Church News Press
In recent weeks, airlines around the world have been reporting substantial losses, declaring bankruptcy or completely shutting down. So far the losses have been mostly of small airlines, but many of the large ones have started to thrash around for merger partners. At $3.71 a gallon, jet fuel is now the single largest expense an airline faces.
In 2000, the airlines fuel bill was $14 billion. It is now pushing $60 billion and climbing. Southwest, the most profitable carrier, recently announced that this year’s fuel bill will be $500 million more than last year and equal to 2007 profits.
During the first quarter of 2008 American airlines lost $328 million; Delta lost $274 million; United lost $537 million; Continental $80 million; Northwest $191 million; and US Airways $236 million. Only Southwest Airlines, which did a better job of hedging its fuel than the others, made a profit.
It is clear we are going to see major changes in air travel shortly.
For some time now, airlines have been eliminating frills, raising prices, filling the planes and effecting whatever other economies come to mind. After the summer flying season ends next September, many airlines are planning to retire 5-10 percent of their least efficient aircraft, thereby reducing their flight schedules by a similar amount.
Knowledgeable observers are expressing doubts these moves will be enough. People are starting to talk about $200 oil which implies that airline fuel costs will double again. Newer aircraft are more efficient, but the improvements are nowhere near what is necessary to keep up with surging fuel costs and, as Continental Airlines concluded this week, there is not enough financial benefit in a merger to keep up with costs.
Airlines are continuing to raise fares -- the average ticket is up 10 percent over last year -- but at some price point the airlines will drive away discretionary travel and they will be left with only essential business and personal travel that is unlikely to fill many planes. On top of the fuel prices is the current economic downturn which is likely to start impacting discretionary travel before the year is out. In short, airplanes simply can’t make money while charging affordable fares at current, much less prospective, fuel prices. The era of 500 mph travel for most people is nearly over.
There is no obvious way out of this dilemma unless there is a major breakthrough in the efficiency of aircraft. Fares will continue to rise. Flights will be cut. Smaller cities will lose their air service. Shorter trips will be eliminated as being too expensive. More seats are likely to be squeezed on planes and one manufacturer is even pondering seat-less planes in which passengers are strapped to boards during the flight.
image above: Boeing rendering of SST proposal from early 1970's.
Ten or 15 years from now, air travel is likely to be significantly reduced; will be patronized by business travelers or the very wealthy; and will be limited to trans-oceanic or long-distance flights between major population centers.
Consolidation of the major airlines and the demise of the smaller regional carriers has already started. After a number of rounds of consolidation, we will be down to only a handful of national or multi-national airlines probably subsidized by governments on “national security” grounds.
While the demise of inexpensive discretionary air travel has ramifications for many industries, in the first instance tourism is likely to be hit the hardest.
Ignoring for the minute the likely effects of $4 or $5 gasoline in California this summer, Las Vegas reports that nearly half of its tourists arrive by air. To make matters worse, resort operators have recently spent billions upgrading their facilities to the $300 a night places that are less likely to attract drive up customers. The same pattern can be repeated at air-dependent tourist attractions all over the world.
There is still a remarkable amount of denial in the airline business. This week Airbus released a forecast showing that the number of large commercial aircraft will grow from 15,000 to 33,000 in the next 20 years and that the number of passengers will triple.
If there is to be a long-term future for air travel, it is unlikely to be with liquid fuel powered turbines driving heavier than air devices. The U.S. Air Force is currently embarked on a campaign to convince the Congress to buy it a multi-billion dollar facility to convert coal to jet fuel and a couple of airlines are busy demonstrating that their planes will run on biofuels.
image above: Boeing SST mockup in hanger in early 1970's. Now they build the 787 Dreamliner.
While limited use of coal to liquid fuel or biofuels for aircraft may see limited use, neither of these replacements is likely to produce enough affordable fuel to keep Airbus’s 33,000 large transport jets in the air 20 years from now.
Over the longer run, the development of hydrogen powered aircraft might prove feasible or perhaps lighter-than-air dirigibles might be developed to the point where they can move people and goods efficiently over long distances. In any case, the day of the ubiquitous kerosene-powered jet transport which revolutionized travel for many of us in the second half of the 20th century is likely to be shorter than most realize.
SUBJECT: AIRLINES COLLAPSE
SOURCE: DAVID WARD email@example.com
POSTED: 19 APRIL 2008 - 9:30am HST
The end of air travel as we know it
image above: Concorde SST in flames at takeoff from Orly Airport in 2000
by Barbara Yaffe on 17 April 2008 in The Vancouver Sun
In crafting policy around air travel, governments both here abroad are flying by the seat of their pants.
The world is starting to be affected by the twin challenges of climate change and peak oil, but many involved in transportation planning are looking the other way.
In fact, it's easy to believe air travel will keep on expanding, given all the jam-packed airplanes, delayed flights and crowded airports. But cracks are appearing.
In the first two weeks of April, the following airlines went belly up or sought bankruptcy protection: Aloha Airlines; Oasis Hong Kong Airlines, ATA, Skybus, Frontier Airlines and Champion Air.
For now, it's the budget and regional carriers that appear most vulnerable. But Italy's national carrier Alitalia is in dire straits, and Delta, reacting to high fuel prices, this week announced a merger with Northwest Airlines.
Air travel is facing static on two fronts. In terms of climate change, air travel -- a relatively small industry worldwide -- burns kerosene jet fuel that accounts for between four and nine per cent of all climate change on the planet, according to the David Suzuki Foundation.
Britain's Stockholm Institute at the University of York back in 2004 identified increased air travel as one of the most serious environmental threats facing the planet. It recommended travellers be required to use public transit to access airports and that they use rail for any journey under 400 miles.
On the peak oil front, with a projected decline in global oil reserves, airlines are finding themselves unable to keep up with fuel costs.
That has led to efforts to economize on other fronts such as maintenance, which explains American Airlines' current dilemma.
The New York Times reported last week that some big U.S. carriers plan to reduce domestic capacity in 2008 with the express goal of driving up airfares to offset rising fuel costs.
Toronto urban planner Richard Gilbert cites a new forecast by the International Air Transport Association. It projects a $4.5 billion industry-wide net profit for 2008. But that's predicated on oil priced at $86 per barrel.
Oil was $105 per barrel last month. On that basis, IATA's projected profit becomes a 2008 loss of nearly $30 billion -- much higher than the last recorded loss, in 2002, of $11.3 billion.
And consider, most observers believe oil will go beyond $105.
"The place where airline use will actually decline is in North America where we have turned flying into 'buses with wings' mass transportation," says Anthony Perl, an Simon Fraser University urban studies professor who, along with Gilbert, authored the recently published Transport Revolutions.
Their book explores the effect peak oil is likely to have on global transport.
Perl believes air travel in the future will be reserved for the rich, many of whom will use "micro jets." Others will pay big bucks to be transported in larger, fuel efficient aircraft that ply high volume, long-range routes.
He foresees a new type of passenger aircraft, designed for fuel efficiency -- one that's bat-shaped, resembling a B-52 bomber, with 20-seat rows.
Perl considers developments like the Pacific Gateway Strategy to be folly. It's counterproductive, he warns, to keep building infrastructure for traditional transit modes that are reliant on ever-more-costly oil resources.
Governments and transit authorities need to recognize, given the energy crunch, they're wasting tax dollars by plowing cash into airport and road expansion projects.
Perl, appointed this week by the Harper government to Via Rail's board of directors, foresees a future where vehicles will mainly be electrically powered and greater reliance will be placed on railways.
Globally, no more than 25 airports will be functional by 2025, Perl predicts, only one of them in the Pacific Northwest.
And that airport, Perl says, will be a "travelport," featuring high-speed electrical rail interconnections designed to carry passengers to and from all points around Cascadia.
"If Portland or Seattle figure this out before YVR does, that will spell the end of non-stop flights to Asia from Vancouver." Sadly, he says, "there's zero planning to bring inter-city rail into YVR."
Perhaps the message in all this is, if you were planning to take that trip of a lifetime, you should have done it last year.
Island Breath: Aloha to Aloha Air 4/14/08