Briefings For The Week Monday 19th to Friday 23th Oct
Monday 19th October 2009
The first article that caught my eye at the beginning of the week was one that read “crude oil prices hit a one year high”. This is a big blow to the whole industry because now all the airlines have to fork out even more money some may not have to purchase the fuel which runs their planes. If this continues some airlines may have to go out of business as they simply cannot afford to go further in debt which alternatively would end in bankruptcy. I believe the reason behind this rise was because of the stock markets rapid inflation and the dollar continuing to slide. However it should be taken into consideration that this was the 1st time since October 14th 2008 that Crude has settled over $75 a barrel and although this may suggest that this is a one of, because of the dollars downfall, other currency holders from overseas may see this has a slight advantage over the dollar. Europeans who have a very strong currency can easily step in and buy the oil which in short would be cheaper for them and more expensive for their American rivals.
Another segment that I found interesting was about the long running debate on whether federal lawmakers should create a passenger bill of rights. A lot of people seem to think that airlines are not doing enough to meet people’s basic needs for enough food, water, hygienic toilets and temperature control. If these rights are introduced it would be great for the passenger, but the problem is with the airlines because these things do not come cheap. Airlines do have a responsibility to give passengers what they need. But what airlines might argue is they need the bare minimum. And the bare minimum means cheap in the aviation industry. Why should airlines have to fork out extra millions on these unnecessary luxuries especially if what they are giving customers already seems to work and is profitable? One more part to this debate was whether passengers should be allowed to deplane after three hours on the tarmac. Often, especially on stopovers, passengers are literally forced to sit in their seat whilst the plane undergoes its maintenance work and other necessary changes i.e. re-fuelling.
I strongly believe both of these two things could have an impact on European trans-atlantic flights. If passengers flying on British Airways, for example, are travelling to the U.S. and their flight requires a stop over in one of the states, they may get disgruntled having to wait more than 3 hours on a plane to move off again, more so if they aren’t getting serviced during that time i.e. any food or water given to them. This could end up really nasty and be such a negative influence that people may not want to fly again well maybe with one particular airline so its very important that customers are taken care of but again this could only mean forking out more money.
Tuesday 20th October 2009
They are introducing a new strip search scanner at Manchester airport has a new even more advanced way of security. It is an X-ray machine called RapiScan and its being tested out at Manchester airport, the way it works is quite simple, customers go through the scanning machine and it brings up a clear picture of anything the customer may have on them. Funny enough it also shows piercings, body parts and breast enlargements. Children would not be able to go through this however as it would be braking a law that suggest children under the age of 18 shouldn’t be subjected to any form of naked imagery. This means all means that customers will not have to go through the tortuous and often embarrassing frisk search by someone they don’t know and having other strangers looking on. It remains to be seen how successful it will be, the majority I believe will approve purely on the basis that they will not be man handled any more and others might say they don’t won’t some stranger in a room being able to view their private body parts. If it is successful we may see more RapiScans not only across the UK but all over Europe might bet on board with idea as well.
Wednesday 21st October 2009
Delta is increasing its services to 17 more cities worldwide. It is believed that it would include a few cities in Europe such as Copenhagen, Edingborough & London. This is bad news because if one the biggest or if not the biggest airline in the world wants to expand further, it can only mean an increase in competition for all the European airlines especially since it has gone on record saying it expects ” that about half of its capacity in the coming years will be on international routes”- http://www.bloomberg.com/apps/news?pid=20601101&sid=atTXjwunsg4k , Paragraph 4. However, it is not all bad news. They are also cutting down the seats on international service by 15% due to a lower demand.
Thursday 22nd October 2009
Airline shares continued to fall as oil prices rose. Crude rose by $2.25 to make the cost $81.37 a barrel. Brent crude also saw an $2.48 increase to $79.72. This has made it even more difficult for even the biggest of airlines to cope financially with the continuing increase in oil prices. However it would seem that low cost carries are seeing some profit as the larger airlines are forced to cut back due to lack of business travel and more people wanting to travel in the economy class. Major European airlines such as British Airways and AirFrance do tend to rely on the business travelers especially during the winter months when the demand is that good so they could suffer and it is no secret that if the oil prices rise Europe’s small passenger carriers might have be forced to declare bankruptcy.
European Unions environment ministers held talks in Luxemburg to reduce the amount of CO2 emissions by 20% when 2020 rolls around. The idea is that the gas that comes from airplanes and ships must by reduce with a view to improving climate change. Now why this is definitely a plus for the environment and the world as a whole, it could have huge ramifications on European airlines. This means that airlines would have to make cutbacks in their aircraft loans and purchases even if the demand from customers to travel is high. If these plans go ahead European airlines can expect a huge financial loss.