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Cheap Flights Coming to an end?

Discussion in 'Business & Economics' started by The Scotsman, Apr 12, 2008.

  1. The Scotsman

    The Scotsman Well-Known Member

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    I noticed a few weeks ago that Michael O'Leary head honcho at RyanAir offloaded a truckload of share options about £150m a while back and parked the cash in his own account, then I read this....
    source guess he knows something about the future......


    The picture ain't too hot in the US either! US Aviation ain't looking too rosey at the moment Aloha, Champion and ATA Airlines have declared bankruptcy protection recently and it would appear that all positions are going or have gone.

    There's also a few rumblings of costs catching up with a few operators Jetblue sold 6 planes and Frontier have sold 4 and not replacing, United is grounding up to 20 aircraft, Delta is grounding 10 I think with Northwest grounding 24 DC-9 aircraft (about time too in all honesty) and a truck load are suspending hirings even the regionals are suffering - Expressjet, Skyways, ASA, Mesa etal are lowering contracted flying hours.

    I think the picture for Europe is going to get bad too shortly with aircraft rolling off the line with no real growth in the market to fill those new aircraft! The Low Cost Model demands opening up new untapped routes with no competition and there are none left and now lots of competition so the model is being tested to the extreme.

    They say the aviation industry is the barometer of the economy, so before you buy a ticket check the balance sheet of your carrier they may not be there for the return leg.
     
  2. 9sublime

    9sublime Active Member

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    Are you an airline pilot by any chance?
     
  3. Bunz

    Bunz New Member

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    Cheap flights? people here are just looking for flights. Break out the old DC-3s people got places to be.

    As a side note, in 2000, I could get 5 round trip tickets from my village to Anchorage for a thousand bucks, then use them at my liesure. Now it costs $550 for a single round trip ticket. We are talking about an hour and a half flight! There was a time when I would say at 400 bucks that the scenery made the money worth it, but I gave that up!
    So, I fly much less to say the least. Which makes it rough on the airlines. They are battling mega high fuel costs. They have to pass it on the the customer. The price goes up, customers fly less and profit margins get even tighter and might warrant another price jump.

    My heart goes out the the employees of those airlines.
     
  4. The Scotsman

    The Scotsman Well-Known Member

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    No way.....I can think of much better ways of getting bored sitting in front of a computer :D
     
  5. The Scotsman

    The Scotsman Well-Known Member

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    Hawaii loses 85% of air cargo capability

    By Rick Daysog
    Advertiser Staff Writer

    Hawai'i's economy, reeling from the loss of thousands of jobs with the demise of Aloha Airlines' passenger service, the closure of Molokai Ranch and NCL America's decision to pull out two of its ships, now faces the loss of a vital transportation link with the shutdown of Aloha's cargo operations.

    Aloha abruptly closed its profitable air freight business yesterday after its lender, GMAC Commercial Finance LLC, cut off financing.

    The shutdown means the loss of 300 jobs and the end of a business that handled more than 100 million pounds of cargo each year — about 85 percent of all goods flown between O'ahu and the Neighbor Islands.

    The impact will be felt by retailers and wholesalers of time-sensitive consumer items such as baked goods, produce, meat, medical supplies, newspapers, auto parts and construction materials. The move also will affect movement of interisland mail and the flow of cash between local banks and their Neighbor Island branches.

    "This is a critical link in the state economy," said Leroy Laney, professor of economics and finance at Hawai'i Pacific University.

    "The shutdown will definitely impact the local economy, and with medical supplies, it could lead to life or death situations."

    Gov. Linda Lingle said in a news release that she has had discussions with other cargo operators to find shipping alternatives since Aloha filed for bankruptcy.

    Maui Mayor Charmaine Tavares said the impact will be especially hard on local entrepreneurs and farmers who rely on Aloha's daily service.

    "I am concerned for both the employees of Aloha Airlines cargo as well as for the many small businesses that will be impacted," Tavares said.

    Founded in 1946, Aloha was the state's second-largest airline until it shut down its passenger service on March 31 and terminated 1,900 employees. The closing came 11 days after Aloha filed for Chapter 11 bankruptcy reorganization. Aloha said it lost $120 million in two years because of soaring fuel prices and a costly interisland fare war.

    Yesterday, Aloha flew its final two afternoon cargo flights. The company canceled six nighttime cargo flights.

    Aloha said last night that it was in the process of informing cargo employees about the layoffs.

    sale may be affected

    The shutdown could also jeopardize the sale of Aloha's 1,100-employee contract services division to Los Angeles-based Pacific Air Cargo.

    Pacific Air last week agreed to pay $2.05 million for the unit, which handles ticketing, baggage services, ramp duties and other ground services for carriers that serve Hawai'i.

    The deal, which was approved last week by a federal bankruptcy judge, will now have to be reviewed again by a court-appointed bankruptcy trustee.

    As of last night, the company's contract services division remained opened.

    The layoffs are more bad news for an economy shaken by the shutdown of Molokai Ranch, which resulted in the loss of 120 jobs, and the grounding of Aloha's passenger service, which represented the state's largest-ever mass layoffs.

    State lawmakers are now bracing for the impact of the pullout of Norwegian Cruise Lines' two ships, which could rival the 2,200 total jobs lost at Aloha.

    "This is one more indicator that our economy is suffering," said state House Speaker Calvin Say.

    "It is also a wake-up call for all of us on the importance of our transportation infrastructure."

    closure a surprise

    The Aloha cargo closure took employees, customers and creditors by surprise, especially because Aloha had at least two bids for its profitable cargo unit.

    On March 27, the Seattle-based owner of Young Brothers/Hawaiian Tug & Barge, Saltchuk Resources Inc., signed a letter of intent to purchase the cargo division for $13 million.

    And last week, locally based Jupiter Holdings Group bid $13.65 million for the division.

    James Wagner, Jupiter's attorney, said the company was prepared to go through with its purchase as recently as yesterday afternoon. But GMAC unexpectedly upped the price to $15 million and required a higher deposit, he said.

    Saltchuk, meanwhile, pulled its bid last week after Aloha and GMAC changed the terms of the bidding.

    "This all has to do with other parties changing the deal without any warning," Wagner said. "I've been in practice over 30 years and I've never seen a case end like this."

    GMAC took the lead in the sale talks because it is owed $44 million by Aloha and has provided money to keep the cargo operations flying after it filed for bankruptcy protection on March 20.

    The lender previously threatened to pull the financing for the cargo operations after a dispute with Aloha's pilots.

    Aloha pilots laid off with the closure of the passenger service wanted the option to work for the cargo division. Last week, the pilots' union threatened to strike over the issue.

    Attorneys for the pilots union and Aloha's unsecured creditors said in bankruptcy court that Aloha will get less than $13 million by shutting down the cargo operations and selling its equipment.

    "For GMAC to walk away from legitimate offers makes absolutely no sense at all," added pilot John Riddel. "It's a travesty. This should have never happened. Hundreds of dedicated employees are being victimized today."

    Paul Brewbaker, chief economist at the Bank of Hawaii, said it may be some time before competing carriers and cargo operators fill the void left by Aloha.

    "This is huge," said Brewbaker. "I don't doubt that somebody will come in and fill the void but in the short-term, anyone who wants to go to market is hung up."

    Aloha used six Boeing 737-200 planes solely for interisland cargo. Hawaiian and other carriers take cargo in their passenger planes and don't have aircraft dedicated to cargo.

    Brewbaker said it will be more difficult to attract a new competitor to the interisland cargo market than several years ago given turmoil in the nation's credit markets and high fuel prices.

    http://honoluluadvertiser.com/apps/pbcs.dll/article?AID=/20080429/NEWS01/304300006

    ........................................................................

    What a buggers muddle - and its the local economy that's going to suffer, not nice for the Islanders :mad:
     
  6. American First

    American First New Member

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    I doubt that we will ever see "cheap flights" again. I remember when my father could get a book of 4 tickets from Delta to fly from Florida, where he was living, to Ohio, his home state for a very reasonable price. This is all gone. We loved flying to Oahu on United. Very reasonable and great flight. This too is gone. How said. Hawaii was one of my most beloved trips. This will surely effect the tourist trade. The last trip we made, I made a friend from Japan. It was cheaper for them to flly from Japan than us from Ohio of course. I may never see her again. I am only glad I saw better times. An advantage of being born earlier lol.
     
  7. 9sublime

    9sublime Active Member

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    I bought a £50 return flight to France from the UK for the 11th of August a few months ago... reckon you could still get that now?
     
  8. American First

    American First New Member

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    Sorry, I do not know what that is in American Dollars. Isn't it wonderful the internet is now globalized.:)
     
  9. The Scotsman

    The Scotsman Well-Known Member

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    Call it $100 even and I'll buy the beers with the change :D
     
  10. American First

    American First New Member

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    You are on, but I have no idea where you live from the scrabled description lol. So next time you have a beer raise your glass to me.;)
     
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