quotable archives: June 2008 | May 2008 | April 2008
“…the industry could ‘change on a dime’ if crude oil rose above $150 or fell below $100 a barrel. Factor in the souring economy, and the possibility people may travel less in coming months, and the financial picture is precarious,” said Morningstar Analyst Brian Nelson. Philadelphia Enquirer 05/31/08
``A crisis point is fast approaching for the aviation industry,'' London-based Numis Securities analysts Wyn Ellis and Richard Carter said in a note to investors yesterday. ``There are likely to be a number of spectacular casualties as brutal economic reality hits home.'' Bloomberg 05/30/08
"The near-term task for all the airlines is the same...that is to cut nonfuel costs where possible, trim flying in the domestic market and try to raise fares even more. It's really back to basics," said Standard & Poor Senior Credit Analyst Philip Baggaley. New York Times 05/29/08
“…U.S. carriers will likely spend $60 billion on jet fuel this year—nearly four times what they paid in 2000. Because of the spike in fuel costs, airlines now lose roughly $60 on every round-trip passenger, a slow bleed that puts the industry on pace to lose $7.2 billion this year, the largest yearly loss ever.” BusinessWeek 05/28/08
Ray Neidl, an analyst with Calyon Securities, wrote that the industry needs either "major capacity shrinkage that will enable large ticket-price increases" or a substantial decline in oil prices, at least down to $100 per barrel, just to return to break-even levels. Travel Technology Update 05/08
``It's unprecedented. I've never seen the major carriers move with such aggressive cuts in capacity other than after the 9/11 attacks,'' said John Walsh, president of consulting firm Walsh Aviation in Annapolis, Maryland. ``This time, it's deeper and it's permanent. There's a sense of desperation.'' Bloomberg 05/28/08
“The problem right now is that no one knows where the price of oil is going to fall down," says Darryl Jenkins, an aviation expert at Ohio State University. "Right now you're just in kind of the worst of all possible situations. Your planning becomes 'What do we do to lose the least amount of money?'" BusinessWeek 05/28/08
"The U.S. airlines badly need more capital to survive, and the only players with the resources to buy in are the [cash-rich] European carriers. Why would Congress object to that?" asks Robert Mann, an industry consultant in Port Washington, N.Y.” BusinessWeek 05/28/08
The association also called on lawmakers to keep an eye on commodities speculation and to pressure U.S. oil refiners to increase utilization, which ATA says has fallen to "abnormally low levels." Aviation Daily 05/27/08
"The dramatic increase in jet fuel prices has increased airline costs significantly over the past two months, and, if sustained, could threaten their liquidity and financial profiles," said Standard & Poor Credit Analyst Philip Baggaley. Thestreet.com 05/23/08
“The industry is at a crossroads at current oil prices, which have risen much faster than we had anticipated. The current business model is not sustainable at oil price levels above $130/bbl,” said Ray Neidl, Calyon Securities 5/22/08
“Everybody expects frequent, convenient, high-quality service with great connectivity to the rest of the world...But given the steep rise in fuel prices, which are up 84.5 percent from a year ago, airlines have to make difficult choices on service," said Robert Mann, an industry consultant. Herald Tribune 5/21/08
"There will be blood," wrote analyst Jamie Baker in the research report, forecasting a 2008 operating loss for the industry of $7.2 billion, wider then a prior forecast of a loss of $4.6 billion. That would be an all-time record for the industry, he noted. CNN Money, 5/19/08
The Port Authority called the [DOT slot auction] plan "poorly conceived" and vowed to "work with airlines to examine our options for prohibiting the federal government from implementing [it]." Aviation Daily, 5/16/08
"We're going to spend $60 billion in '08 on fuel. That's about $18-$20 billion more than we spent last year. It is our largest cost center. It's the number one cost and it's driving us absolutely crazy." May said, E&ETV's OnPoint 5/17/08
"We hate delays," May said. "We want to do everything we can to cure them." May said delays are expected to cost airlines at least $10 billion this year. Commercial carriers are looking at ways to save fuel, he said, including slowing planes in flight "a little bit" to increase fuel efficiency. Star-Telegram, 5/14/08
“All these carriers are in the same boat," said Michael Boyd, who runs a Colorado-based aviation consulting company. "The name of the game now is survival." Mercury News, 5/10/08
“The airlines have historically done a much better job than the auto companies at increasing efficiency," said Deron Lovaas, a transit expert at the Natural Resources Defense Council. "They feel fuel prices much more than your average consumer feels changes in fuel costs at the pump." USA Today, 5/8/08
"The fuel situation has been devastating for airlines and people are wondering what's going to happen with jet fuel costs due to the uncertainty of the oil market," said Jack Kyser, chief economist for the Los Angeles Economic Development Corp. redOrbit, 5/7/08
"Right now, no [carriers] are thinking about making a profit; they're thinking about whether they will survive," said Airline Business Magazine Americas Editor David Field. The News & Observer, 5/6/08
"In 2008, we have an industry in crisis" in which airlines are switching to "survival mode," said Calyon Securities Analyst Ray Neidl. The Atlanta Journal-Constitution 5/5/08
AirlineForecasts CEO and Chief Analyst Vaughn Cordle said, "We've got an industry that's in trouble…if oil prices stay anywhere near $100, $120 for the year ... we'll have a massive restructuring of the airline industry." Associated Press, 5/4/08
“High fuel prices, a weak economy and consumer resistance to fare increases will contribute to industry losses in 2008,” reported Moody's Investors Service. Reuters, 05/01/08
"The reality is that there's no U.S. airline that has a sustainable business model if $117-a-barrel oil prices endure," says Dave Emerson, head of Bain & Co.'s global airline consulting practice. USA Today, 5/1/08