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Thoughts regarding market's effects on airline travel?

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What about oil guys? Oil has dropped a TON and is hovering around $80 bucks a barrel right now. Surely this is going to help the airlines some despite the market?
 
October 6, 2008, 4:43 pm
Airline Traffic Shrinks in September

Posted by Matt Phillips
SeptemberTraffic_E_20081006150128.jpg

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Large carriers saw slumping air traffic in September, as the impact of rising fares and economic turmoil took its toll.
Though the airlines have long indicated a desire to slim down in the face of historically high fuel costs, a few carriers — JetBlue, AirTran and Continental — had managed to eke out traffic gains in August.
Not so last month. Continental led the pack with a nearly 11% drop in passenger traffic, by revenue passenger miles, a closely watched metric equal to one paying passenger flown one mile. Other domestic legacy carriers also posted steep drops, including American (-9.1%) and United (-9.2%).
Discounters also saw traffic fall during September. Dallas-based Southwest’s traffic fell 5.9%. JetBlue fell 4.8%. Even, AirTran, whose large traffic increases in July and August bucked industrywide trends, finally fell in line with other carriers, dropping 2%.
So why is traffic on the decline? September saw the bulk of the planned capacity cuts that the airlines announced over the summer. And rising fares probably put leisure jaunts out of reach for a certain segment of the population. Of course, the fact that the financial system buckled at the end of the month didn’t help either.
In an e-mail, Darin Lee, an aviation economist with consultancy LECG in Boston, told us all of those elements probably played a role in the downturn in traffic, with “lower capacity being the most important of the three factors.” But going forward, the health of the economy will be important to watch.
“It’s pretty clear to me that economic turmoil is going to be a big theme the rest of 2008 and into 2009,” Lee wrote.
UPDATE: You guys are right. We should have mentioned Hurricane Ike’s impact on Continental’s traffic numbers. The carrier’s Houston hub — its largest — was closed for more than two days because of the September storm and Continental said Ike would cost it about $50 million.
 
October 6, 2008, 4:43 pm
Airline Traffic Shrinks in September

Posted by Matt Phillips
SeptemberTraffic_E_20081006150128.jpg





Large carriers saw slumping air traffic in September, as the impact of rising fares and economic turmoil took its toll.
Though the airlines have long indicated a desire to slim down in the face of historically high fuel costs, a few carriers — JetBlue, AirTran and Continental — had managed to eke out traffic gains in August.
Not so last month. Continental led the pack with a nearly 11% drop in passenger traffic, by revenue passenger miles, a closely watched metric equal to one paying passenger flown one mile. Other domestic legacy carriers also posted steep drops, including American (-9.1%) and United (-9.2%).
Discounters also saw traffic fall during September. Dallas-based Southwest’s traffic fell 5.9%. JetBlue fell 4.8%. Even, AirTran, whose large traffic increases in July and August bucked industrywide trends, finally fell in line with other carriers, dropping 2%.
So why is traffic on the decline? September saw the bulk of the planned capacity cuts that the airlines announced over the summer. And rising fares probably put leisure jaunts out of reach for a certain segment of the population. Of course, the fact that the financial system buckled at the end of the month didn’t help either.
In an e-mail, Darin Lee, an aviation economist with consultancy LECG in Boston, told us all of those elements probably played a role in the downturn in traffic, with “lower capacity being the most important of the three factors.” But going forward, the health of the economy will be important to watch.
“It’s pretty clear to me that economic turmoil is going to be a big theme the rest of 2008 and into 2009,” Lee wrote.
UPDATE: You guys are right. We should have mentioned Hurricane Ike’s impact on Continental’s traffic numbers. The carrier’s Houston hub — its largest — was closed for more than two days because of the September storm and Continental said Ike would cost it about $50 million.

Airline capacity shrank because the airlines cut flights. As far as what people will do, some people say Netjets won't be affected because rich people who own their own G4s will sell them and then get fractional shares. The people that could afford fractional shares before, may be forced to go First Class on airlines, or atleast middle managers won't be able to use the corporate jet as much. People who could barely afford first class before, will go coach. And people who could go coach before, won't go or won't go as often.


Bye Bye--General Lee
 
And if I am not mistaken, DAL's went up? I am to lazy to log on to Delta net to read the article again.
 
I chose to believe this will be good. We [airlines] have already been through this, got our bailout (which was almost nothing) and have found a way to cope. This is going to dry up growth for premium travel like NJA and those folks will be back on the airline (like P Diddy). Cheap gas and more customers back competing for fewer seats means we start jacking up fares. Gonna be good.
 
I chose to believe this will be good. We [airlines] have already been through this, got our bailout (which was almost nothing) and have found a way to cope. This is going to dry up growth for premium travel like NJA and those folks will be back on the airline (like P Diddy). Cheap gas and more customers back competing for fewer seats means we start jacking up fares. Gonna be good.

I hope your right...And with Obama pushing for the blue collar middle class folk at least they might be able to keep buying tickets even if on a smaller scale.
 
As Lehman learned, being small is not good.

As AIG learned, being big is very nice. Anyone else see the Senate hearing two nights ago on CSPAN? Holy crap!

Now the other shoe is beginning to drop in Europe. Turns out their suits are more screwed up than ours. Some are saying the Euro will not survive. At the same time those risking money and effort in the developing World are reaping the benefits of being a first mover.

Delta's global network positions it well. Letting Air France take over most of the Paris flying, while being a first mover into Africa is yet another indication that Delta's doing a good job right now.

Not that anything can be taken for granted. I don't know how profitable Delta is right now and all this nifty flying doesn't mean much unless the number on the bottom line is positive.

If crowds at the airport are any indication, demand remands OK. My immediate concern is that things might seize up to the point where Captains have to carry a form of monetary exchange to refuel the jet in some places.

Experts say that is starting to flow a little better now, but anyone who lets an airline purchase a few billion dollars worth of fuel on credit has to be aware of the exposure.
 
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As Lehman learned, being small is not good.

As AIG learned, being big is very nice. Anyone else see the Senate hearing two nights ago on CSPAN? Holy crap!

Now the other shoe is beginning to drop in Europe. Turns out their suits are more screwed up than ours. Some are saying the Euro will not survive. At the same time those risking money and effort in the developing World are reaping the benefits of being a first mover.

Your the biggest tard ever. Europe is nowhere near as bad off as we are. The S and P has dropped over 40 percent from its highs in 2007!!!!! If memory serves it was at 1547 now it in the 900. Europe and Asia isn't anywhere close to this level of loss. They may drop some more but won't come close to our massive losses. They are using international accountanting laws, under Bush's deregulation WE DO NOT. Therefore we have much less transparency and it is much easier to skim money from here and there so you can get that big NJ sparkly jet.
 
I disagree: Airlines have NOT been through anything like this before. Airlines have already has their respective poopers worn completely out with high oil, now they are about to get slammed by frzen credit markets. Any airline that files BK will liquidate-and fast!

To be clear: The market has lost @50% of its value. This hurts everyone. I am not a big enough idiot to cash out. I am personally dumping just as much in to retirement as always. The point is: the rich are as affected as the poor if not more so.

Which leads me to the following conclusion: The fractionals are going to get completely hammered. Everyone has always assumed NJA is invincible-they are not. Many of the "rich" own small businesses-which are now unable to get short-term credit. Many of these business will fail, and many of their owners will not be "rich" long.

I believe NJA is stronger than the others, but I think fractionals are going to have a very hard time, very soon. The markets get smacked down, and your 10 mil has suddenly turned to 2 mil-you ain't thinking about going to Acapulco for a couple of days-you are thinking about cashing the hell out of NJA.

I do agree that others are in weaker positions, but I would not want to be at the bottom of any frac list right now.
 
Your the biggest tard ever. Europe is nowhere near as bad off as we are. The S and P has dropped over 40 percent from its highs in 2007!!!!! If memory serves it was at 1547 now it in the 900. Europe and Asia isn't anywhere close to this level of loss. They may drop some more but won't come close to our massive losses. They are using international accountanting laws, under Bush's deregulation WE DO NOT. Therefore we have much less transparency and it is much easier to skim money from here and there so you can get that big NJ sparkly jet.

If you think our entire economy is based on the stock market, and what it does each day, then you may be the 'tard in the room.

Europe is in the suck just as deep-everyone is in for some suck, and when this socialist fool gets into office, you will find out just how bad things can get.
 

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