Predictions for end of 2008

[PCL_128]

Oil: $150-160
Dollar: Up sightly
Inflation: 7% and rising
Housing Market: relatively stable at low levels
President: Obama, by a comfortable margin
War: Status Quo
Airlines:
Furloughs: AA, UAUA, NWA/DAL
Failures: United, Frontier, Sun Country
Impending Failures: UAUA, AA
Capacity Cutbacks: 20%
Leisure Market: Down dramatically
Mergers: NWA-DAL but going very badly

Oil: $115
Dollar: flat
Inflation: 5%
Housing market: flat
President: Obama, 50% to 48%
War: Status quo, with Obama planning to start reductions within 12 months of taking office
Airlines:
Furloughs: AMR, UAL, CAL, LCC, Spirit, maybe more
Failures: FRNT, possibly Spirit, 10% chance of UAL
Impending failures: UAL, Spirit
Capacity cutbacks: 12%
Leisure market: down slightly
Mergers: No more, and DAL/NWA still fighting over SLI

 

[BIGGOAT]

I doubt this year will see any legacy failures. They all have too much cash for that. However, late 2009 maybe a different story if 1Q2008 burn rates continue or accelerate. Delta lost 5-6 billion on paper in the 1Q but only burned @ 127 mil in cash. Similarly, AA lost @ 320 mil in the 1Q but only ate up @ 170 mil in cash. The other majors are similar stories. The real question is who will run out first?

Goat

 

[Occam's Razor]

The required cash-on-hand to enter Chapter 11 (where you gotta pay cash for your uber-Expensive fuel) has risen over 50% from where it was a couple of years ago. That means a legacy airline like NWA or UAL would require about $1.6B to navigate the re-org.

So subtract $1.6B from the cash-on-hand for ____ Airlines, then divide the difference by the daily burn rate.

If we don't change that burn rate number from Red to Black, it will be a bleak Winter for some.

 

[Ty Webb]

McCain supports relaxation of cabotage laws, Obama doesn't. McCain doesn't support the right of airline pilots to strike, Obama does. As an airline pilot I think it would be stupid to support McCain, so I won't.

My prediction for 2008, I still won't have my PGA card.

I don't know about you, but being "an airline pilot" is but one part of my life. I'd rather suffer through not being able to strike than suffer through another Jimmy Carter in the White House.

Besides, with fuel prices being what they are, pilots have more leverage now than any strike. I'd imagine if the UAL "Summer of Love" went on right now, it would be the "Week of Love". :laugh:

 

[JumpersAway]

My job, my profession, my industry is the over riding issue for me. I will sell out all else to get rid of cabotage- and McPain ain't the one to do it. If it takes Obama to do it, the man gets my vote.....

 

[SDF2BUF2MCO]

FedEx and UPS will continue to "prosper" but their day is coming

Jessica Simpson won't find anyone to take her so she'll marry her dad

The Arizona Cardinals will not make the playoffs (shocking I know)

No matter who gets elected for President our government will grow and our taxes will increase

Porn will be taxed, some illegal drugs will become legal so as to generate tax money

Bobby Knight will be a regular guest on Oprah to talk about finding inner peace. He and Tom Cruise will become great friends

The top of the wings will still need to be inspected for punctures after every one of my landings

Used SUV's and trucks will be 1/2 what they were a year ago (will make a great airport vehicle)

More people will be tired of working for the man and go into business for themselves - unfortunately, they'll still be working for the bloated government

 

[skywiz]

Y'all are too much doom and gloom

Oil: $115
Dollar: flat
Inflation: 5%
Housing market: flat
President: Obama, 50% to 48%
War: Status quo, with Obama planning to start reductions within 12 months of taking office
Airlines:
Furloughs: AMR, UAL, CAL, LCC, Spirit, maybe more
Failures: FRNT, possibly Spirit, 10% chance of UAL
Impending failures: UAL, Spirit
Capacity cutbacks: 12%
Leisure market: down slightly
Mergers: No more, and DAL/NWA still fighting over SLI

This is a little more realistic I believe. I can't see oil going up much longer. The oil crisis is getting alot of attention recently from the Int'l community.

Think about it... back when oil was $60 / barrel, what justification was there for spending millions and millions of dollars on research into renewable resources, more exploration of oil, electric cars, etc? Not much. With the price of oil destroying our economy, I believe we as a country (along with others) are currently doing / will do everything we can to explore our refining capacities, look for oil, start accelerating our progression toward non-oil resources and biofuels as well.

My prediction:
2008 through part of 2009: oil stays $120-130 per barrel

After/during 2009: with the value of the dollar improving, inflation tappers off, interests rates go up, AND as a result - oil comes down to around $90-100/barrel and airlines start the cycle upward again....

Then in 2013 another crisis happens and downsizing begins AGAIN

SW

 

[Soverytired]

T

Then in 2013 another crisis happens and downsizing begins AGAIN

SW

2012 is the end of the world, according the ancient Mayan calendar!

I predict massive furloughs.

(hey, this is about as good a guess as anything, right?)

 

[Networ-King]

FedEx and UPS will continue to "prosper" but their day is coming

Jessica Simpson won't find anyone to take her so she'll marry her dad

The Arizona Cardinals will not make the playoffs (shocking I know)

No matter who gets elected for President our government will grow and our taxes will increase

Porn will be taxed, some illegal drugs will become legal so as to generate tax money

Bobby Knight will be a regular guest on Oprah to talk about finding inner peace. He and Tom Cruise will become great friends

The top of the wings will still need to be inspected for punctures after every one of my landings

Used SUV's and trucks will be 1/2 what they were a year ago (will make a great airport vehicle)

More people will be tired of working for the man and go into business for themselves - unfortunately, they'll still be working for the bloated government

You're right..... nothing lasts forever, but at least on this side of the fence when our time comes, instead of making 4 Billion a year net we'll make 2
Billion a year net. Not trying to be a d!ck by saying that, just the worse case scenario that I see. I could be wrong, but on this side of the fence we still have pricing power and not any d!ckhead can buy airplanes and start an airline and under cut everyone else. The age 65 really fu(ked things up for all the airlines, especially this side of the fence since we have the FE's.... I guess I really can't complain though.....

Good luck to all of us cause this is gonna be one fubared year for this industry.

Net

 

[Browntothebone]

FedEx and UPS will continue to "prosper" but their day is coming

Jessica Simpson won't find anyone to take her so she'll marry her dad

The Arizona Cardinals will not make the playoffs (shocking I know)

No matter who gets elected for President our government will grow and our taxes will increase

Porn will be taxed, some illegal drugs will become legal so as to generate tax money

Bobby Knight will be a regular guest on Oprah to talk about finding inner peace. He and Tom Cruise will become great friends

The top of the wings will still need to be inspected for punctures after every one of my landings

Used SUV's and trucks will be 1/2 what they were a year ago (will make a great airport vehicle)

More people will be tired of working for the man and go into business for themselves - unfortunately, they'll still be working for the bloated government

Still waiting for that day. We will have successfully beaten back the ONLY low cost integrator in the USA once the DHL deals goes through. This will give UPS and FedEx even greater pricing power to increase shipping rates and increase profits. You pax guys really have no clue as to this business. We fly airplanes but only as a part of a much larger integrated operation. Since 9-11, UPS has set records for profits each year. We will still profit approximately $4 BILLION in 2008.

 

[FDJ2]

I don't know about you, but being "an airline pilot" is but one part of my life. I'd rather suffer through not being able to strike than suffer through another Jimmy Carter in the White House.

You're right, it's a part of my life, but a very important part, so it's a priority. I don't want a President who supports cabotage and who doesn't support labor rights.

There are of course other issues, such as continuation of fiscally irresponsible government spending. Clinton balanced the budget, Bush put us all in debt. We don't need 4-8 more years of spending on our childrens backs.

Then there is the war with Iraq. What a terrible ongoing blunder that is. Thousands of dead Americans, $100s of billions of dollars, which we don't have, spent on a war against a country that didn't attack us. When Japan bombed Pearl Harbor we didn't go to war with Mexico. Iraq didn't attack us, so why did we invade them?

As a veteran and patriotic American, I can't support those who led us into the Iraqi quagmire.

I can't support John McCain, not only because he supports cabotage and denying labor its rights, but because he's signed off on fiscally irresponsible budgetary policy and a war against a country that never attacked us.

 

[PCL_128]

I don't know about you, but being "an airline pilot" is but one part of my life.

How much of the rest of your life can be sustained if you don't have an income? Being a pilot is a small part of my overall life. Hell, I only fly about 40 hours a month. But the rest of my lifestyle can't be sustained without the income I receive from that 40 hours a month. If McCain has his way, my ability to earn a decent living by flying airplanes will go away, and that means the rest of my lifestyle goes away. Gay marriage and dividend taxes won't mean much to me when I'm living in a cardboard box.

 

[Browntothebone]

My prediction for the rest of 2008 is that there will still be an unending supply of starry eyed airline pilot wannabes lined up at the doorsteps of the pilot academies wanting to fly an RJ.

 

[SDF2BUF2MCO]

I can't support John McCain, not only because he supports cabotage and denying labor its rights, but because he's signed off on fiscally irresponsible budgetary policy and a war against a country that never attacked us.

....and Obama will be fiscally responsible? Politicians look at the average Joe as nothing more than a means to pimp off of so that can extract dollars from their wallets and direct towards their pet projects. I understand your being against McCain but I am speculating Obama is your "solution"?

 

[SDF2BUF2MCO]

You're right..... nothing lasts forever, but at least on this side of the fence when our time comes, instead of making 4 Billion a year net we'll make 2
Billion a year net. Not trying to be a d!ck by saying that, just the worse case scenario that I see. I could be wrong, but on this side of the fence we still have pricing power and not any d!ckhead can buy airplanes and start an airline and under cut everyone else. The age 65 really fu(ked things up for all the airlines, especially this side of the fence since we have the FE's.... I guess I really can't complain though.....

Good luck to all of us cause this is gonna be one fubared year for this industry.

Net

My reference to UPS and FedEx has more to do with my lack of confidence in American business leadership and our politicians. May we all be prosperous with honor.

 

[Dizel8]

We still will not have a coherent energy policy!

 

[PCL_128]

....and Obama will be fiscally responsible?

Just getting us out of Iraq is a good start. A trillion dollar war. Absolutely ridiculous.

 

[Jetjockey]

What's $3B a week? Where rich! (sarcasm)

Where's that cheap Iraqi oil that was to fund a majority of this war?

Bush Sucks!

 

[Tail Gunner Joe]

I predict:

10. Darby will say there is a pilot shortage
9. Boyd says the end is near for the 50 seater
8. Management will continue to say everything is going great until 11:58, then declare bankruptcy at 11:59.
7. The hub in the midwest is closing.
6. A new hub on the west coast is opening.
5. The 787 is opening new routes to Austraila
4. There'll be big changes when Southwest's hedges run out.
3. The bubble will burst on oil prices
2. Mesa still sux

and the grand-daddy of all predictions:

1. There is a BIG announcement coming -- next week.

 

[FDJ2]

....and Obama will be fiscally responsible? Politicians look at the average Joe as nothing more than a means to pimp off of so that can extract dollars from their wallets and direct towards their pet projects. I understand your being against McCain but I am speculating Obama is your "solution"?

I guess we can all be cynical and wish a pox on all their houses, but a choice has to be made.

There is one candidate that openly supports relaxing cabotage laws and another that doesn't. There is one candidate that sponsored a bill to deny pilots the right to strike and one who didn't. There is one candidate who openly supported a war against a country that never attacked us and another who didn't. To me the choice is clear.

 

[Networ-King]

My reference to UPS and FedEx has more to do with my lack of confidence in American business leadership and our politicians. May we all be prosperous with honor.

I fully understand what you are trying to say. The grass is never greener on the other side of the fence. We have our own problems here at big brown. The inefficiencies at this company are horrible. Just like when I was in the pax world.... until you actually lose your a$$ and can't make a profit then the inefficiencies will NEVER get fixed. Think of it like a safety hazard with the FAA. Until there is a plane crash, the policy or rule will not change. Sooo..... when and if UPS starts to lose....eeeerrr.... not make 4 Billion a year, then and only then, will big brown make drastic changes.......

By the way... I read my post and Im thinking the few beers I've had just might have something to do with the punctuation and run ons ..... so go easy people....

ps Browntothebone.....

This whole DHL thing might be good for us, but Im guessing you've never been on the other end of the pole while its being shoved up your career goals or expectations. SSSOOOOO take down a notch and have some respect for our fellow freight dogs. I hope that UPS offers DHL EMPLOYEES preferential interviews for these positions that we MIGHT be getting. Again...good luck to all of us in this god for saken industry........

Net

 

[Soverytired]

Just getting us out of Iraq is a good start. A trillion dollar war. Absolutely ridiculous.

To be quickly replaced with trillions of dollars in entitlements that will never go away (unlike the war).

Oh, excuse me, "investments." Hey, look at all the money thrown at, say, black America since LBJ and the 1960's. Result?

24% of black children born to single mothers in 1960. 71% now. Fatherless families are a huge predictor for a kids eventual success (or failure) in life.

Hey . . . I'm sure once Obama gets spending, we'll manage to get that rate up to 100% single mothers! Sweet! It will be "FAIR"!

 

[JoeMerchant]

How much of the rest of your life can be sustained if you don't have an income? Being a pilot is a small part of my overall life. Hell, I only fly about 40 hours a month. But the rest of my lifestyle can't be sustained without the income I receive from that 40 hours a month. If McCain has his way, my ability to earn a decent living by flying airplanes will go away, and that means the rest of my lifestyle goes away. Gay marriage and dividend taxes won't mean much to me when I'm living in a cardboard box.

In the spirit of Tim Russert, who you and I both respect, can we try to get back to an honest debate....

Do you really believe that you will live in a cardboard box if McCain gets elected? I don't want Obama....but even I know I won't be living in a cardboard box if he gets in....

Aren't we being just a wee bit melodramatic?

Now on to the next issue you raised....You said McCain will hamper your ability to earn a "decent living flying airplanes"....There are many "decent living jobs" flying airplanes that aren't union jobs....How does that jive with your thesis?

Just trying to reign in the rhetoric.....

 

[Dizel8]

Just getting us out of Iraq is a good start.

It'll be a long time before we get out of Iraq, not even sure it will happen during the next presidency.

Even if there is a withdrawal, the US is geared up to be there for a long time to come. Take a look at the size of the embassy. I would imagine a couple of military bases as well, like in Saudi, got to keep the Iranians on their toes.

 

[Soverytired]

It'll be a long time before we get out of Iraq, not even sure it will happen during the next presidency.

Even if there is a withdrawal, the US is geared up to be there for a long time to come. Take a look at the size of the embassy. I would imagine a couple of military bases as well, like in Saudi, got to keep the Iranians on their toes.

But . . but . .. . Obama said he'd leave!

 

[PCL_128]

Do you really believe that you will live in a cardboard box if McCain gets elected?

No, but I think my career in aviation will be in serious jeopardy and I'll have to look for a new way to make a living.

There are many "decent living jobs" flying airplanes that aren't union jobs....How does that jive with your thesis?

They only offer good pay and benefits because they are competing with the union shops. You know this, Joe. Skyworst wouldn't be paying their pilots those industry standard wages if they weren't afraid of a union coming on property. If McCain has his way and neuters all unions once and for all, you can forget decent pay and work rules at every airline.

 

[scoreboardII]

oil at $175-210 barrel
fuel $5.75-7.50 gallon
Air fares double, some triple what they are today.
Inflation at 7%.
Unemployment at 9%.
Load factors down 30% from present levels.
Everyone including WN losing money in 3rd, 4th and 1st qtr.
2009-congress sticks their nose into the mess and forces limited re-regulation on "essential routes".
Foreign ownership occurs as they cherry pick bankrupt carriers.

Flying is not a right nor a necessity. The rich will still get there. Mom and Pop and Betty Sue Williams will not, or they will drive.

This industry will return to it's pre 60's level of participation, less than 5% of the population. About the same level as characterized as "wealthy".

 

[pilotyip]

The Dem's way cut and run

Just getting us out of Iraq is a good start. A trillion dollar war. Absolutely ridiculous.

Yea that is the anti-war Dems way, win a war, then cut off all funding to allow that country to have chance at success. Turn your back on the unbelievable efforts of all the vets who pulled off the victory. Turn your back on the millions who supported your efforts in their country and let them suffer. We did in 1975 and it was a disaster. Source Jim Webb, Dem VA, in his book "A Time to Fight"

 

[PCL_128]

Yea that is the anti-war Dems way, win a war, then cut off all funding to allow that country to have chance at success. Turn your back on the unbelievable efforts of all the vets who pulled off the victory. Turn your back on the millions who supported your efforts in their country and let them suffer. We did in 1975 and it was a disaster. Source Jim Webb, Dem VA, in his book "A Time to Fight"

Yes, you would do well to listen to Jim Webb. His thoughts? Get the hell out of Iraq.

 

[Benhuntn]

Terrorist will reverse themselves and back McCain.