Effect of Fuel on Flight Costs

[z109]

IATA have also updated for the possibility of recession, not just for the higher price of oil. Major scheduled airlines make most of their money on business travel. If the US, for example, is in recession, carriers with a strong transatlantic exposure will be in serious trouble.

The boss of Air France-KLM is right, but what he didn't say is that lots of scheduled airlines are also going to go bust. Would you book a flight with Alitalia? With Spain likely to go into recession, Iberia are going to suffer, in the UK, BA and BMI will both hurt too.

GDE, speculation is right! Where is this recovery going to come from? The US consumer is 70% of US GDP and has no savings, no house equity, masses of debt, and is looking at having no job (whether there's a formal recession or not).

 

[OverseasCafe]

There is an interesting piece on Finfacts here on Ryanair's results announcement yesterday, its claims that it may hike fares by 5% and the International Air Transport Association's (IATA) outlook for the airline industry for the rest of 2008 which is pretty bleak.

 

[riviera]

the likes of Cape Verde and Canaries are really going to be hit by this

South of France should be OK. The Ryanair flight to Nice is about half the price of the Aer lingus flight but the latter is always full.

Strange.

I'll leave the analysis to someone else.