Airlines

☆ Anticipated World Oil Glut Is Bad News For Large Commercial Aircraft Builders

News Analysis: Some Aircraft Brokers and Economists think the Anticipated World Oil Glut Is Bad News For Large Commercial Aircraft Builders; for EVERYTHING IS IN SOME WAY RELATED.  For many years the Airframes have been extolling the virtues of lighter Carbon Composite Aircraft because “Oil will soon cost $180 to $200 Dollars per Barrel” many of their Executives declared; very unrealistic at a minimum.

The Organization of Petroleum Exporting Countries (OPEC) consist of the following twelve Members: Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, and Venezuela; Internationally, a Highly Esteemed Group.

Imminently, Iran, Iraq, and Libya will have their oil flowing globally, as the other OPEC members  hypothetically attempt to reduce Oil Production to keep the price elevated. Perhaps, conflicting with OPEC’s possible strategy is Non-OPEC Oil Produced in America, Brazil, Canada, Norway, and Russia (the world’s largest Oil Producer). As more oil is discovered in the various Oceans and Seas, even more oil will be produced; it is a Natural Process which occurs throughout the Planet, nothing more (many Geologists now think).

Quantitative increases in Oil Production can bring decreases in Unit Cost of Production (so it benefits ALL Producers to Produce and sell more Oil). Greater Petroleum produced and sold, even at a slightly lesser price, can produce more total dollars sold in a year.

Diminution is Crude Oil Prices can translate to Aviation Fuel Savings for Airlines; as aforementioned: Anticipated World Oil Glut Is Bad News For Large Commercial Aircraft Builders.

If Aviation Fuel Prices drop, Airlines may decide to keep their existing planes rather than spending Hundreds of Millions of Dollars PER PLANE to save some fuel.

Additionally, Aviation Gas prices may become impacted by Bio-Fuels in the future. As Engine Builders and Civil Aviation Authorities approve such fuels, they will impact supply levels upward. 

Some Governments are presently thinking of increasing their Revenues by Eliminating Aircraft Depreciation Methodologies en toto. If this occurs, the taxpayers of a Country would no longer being the subsidizers of Aircraft Purchases; a HUGE BLOW to Commercial Airframes. The existing long-term pathetic World Economies are making the Public much less receptive to being  “Sugar Daddies” for Airlines and Commercial Aircraft Builders (in Taxpayers paying for that portion of the Aircraft that has been ‘Depreciated’). If the purchases of Aircraft cannot be depreciated many airlines will not buy as they do now “To Be Fashionable with The Latest Aircraft Iteration”.

As for present Airframe Stock Prices: “Like the Aircraft they fabricate, those which soar upwards can rapidly descend”.

Reality.

Reference: http://tinyurl.com/qa5tc64

★ Big Aircraft Sales, Small Passenger Seats Rile Passengers, Etc.

News Analysis: The Two Largest Commercial Aircraft Manufacturers are gleeful of their Sales Performances in 2013. The market for the World’s Largest Airliner has improved. The Smaller Single Aisle Aircraft Sales are performing very well. Their Common Stocks are up measurably as a result.

An area of interest for 2014 in Aviation is: It becomes a blot on the records of  Airlines as to wide-spread Customer Dissatisfaction with the smaller seats on the Single-Aisle Aircraft in particular. The Airlines increasing call for greater profitability (at the cost of passenger discomfort) has the Airframes ordering more of the smaller seats to “Cram Into” the fuselages. “More Passengers, More Revenue” is the Airlines’ Mantra. Since the “Me Too” Management of the Airlines copy what other Airlines Managements are ordering for their airplanes, passengers have little choice in seating. If they do want a little extra space, (which had been ‘normal seating’ for years) they now have to pay extra  for it; Extortion?

The “Fisticuffs” (of passengers against passengers or against flight crews) is due, in part, to “Minimalist Thinking” by Airline Managements regarding “Proper Passenger Environments”.

Discomfort breeds Hostility. Many people think the ‘Airlines Quest For Increased Profitability’ will only have the effect of “Charging More But Getting Less” for Airline Passengers.

The “Cookie Cutter” Mentality of Airlines’ Management some say is evidenced by the fact that the Most Unique Difference of Airline to Airline (Anywhere in the World) is their Aircraft Liveries!

The World’s Airline Passengers Deserve Better.

In 2014, Carbon/Carbon Matrix Composite Aircraft by Both of the Airframes will be Operational around the World. This “Advanced” Technology will bring it own “Advanced Failures” with it. What has been utilized on physically smaller “Shorter Life” Military Aircraft does not necessarily represent what is best for large Commercial Aircraft. A CERTAIN BENEFIT to the Airframes will be the fact that the Composite Planes will have shorter ‘Mean Times Between Failures’ than Metal Aircraft, Structural Engineers say. Airframes will be able to sell more Aircraft as a result some think.

Perhaps, as an example, the recent Ethiopian Airlines ‘Small Battery Fire” caused an alleged TWO MONTHS of “SECRET” Repair by its Airframe. Will this particular airplane have ‘normal life expectancy’; how can one be sure?  That a metal aircraft would be a much simpler fix is certain Maintenance Repair Organizations say.

Investors who have “Gone Long” on the two Airframes might expect Significant Problems to arise with Composite Technology on Commercial Aircraft resulting in a possible very quick diminution of their Common Stock Values.

The Short Term Benefits of flying ‘marginally lighter’ Composite Aircraft” might be upset by the ‘Inherent Frailties” of Composites used in Commercial Aircraft (De-lamination, Fire, and Impact Detonation). One should ask “Aircraft Structural Engineers” about this matter before investing or ask those who have actually bonded Composites. Ask “How does Bonding using Vacuum Bagging in an Autoclave differ from “Cold Bonding” in an Aircraft Hangar? What are the benefits of each process? If there is Landing Gear Failure what will happen to a Composite Fuselage hitting the runway?” The Aircraft/Power Plant Mechanics who presumably worked on the Ethiopian Airlines Aircraft should know.  Investors in Aircraft Insurance (or Re-Insurance Underwriters in particular) should pay attention to this probability. There could be Catastrophic Insurance Losses if a couple of Aircraft Events occurred through Fire or Crash or both.

Reality.

Reference: http://bigstory.ap.org/article/airbus-logs-record-2013-still-behind-boeing

Qantas Airlines of Australia Is The World’s Safest Carrier

News Analysis: Over 60 years without a Fatality have given Qantas an enviable record other Airlines would love to emulate. In addition to Qantas for “Seven Star” Ratings are Air New Zealand, All Nippon Airways, Cathay Pacific Airways, Emirates, Etihad Airways, Eva Air, Royal Jordanian, Singapore Airlines and Virgin Atlantic.

It is unfortunate that Airlines, in the country of the biggest  Aircraft Company in the World, are not in this ‘Global Premier League’ as aforementioned. Perhaps the “Non-Premier” Airlines will eventually  realize that their chase for ‘Short Term Profits’ (so their Common Stock Prices rise) gets them NO Long Term Sustained Profitability. This because “Cheap Food, Poor Passenger Service, and Tardy Flights” divert customers elsewhere.

Reality.

Reference: http://www.airlineratings.com/news/201/qantas-the-safest-airline

Airlines Upgrade Passenger Amenities For Increased Profits

News Analysis: Airlines around the world are attempting to increase their Profits Per Kilometers Flown by offering passengers a plethora of amenities. From the Waiting Rooms at Airports through Airline Flights, passengers, by paying more are getting more (but at proportionately lesser costs to Airlines due to volume).

The approaches taken by Airlines has been of one mode over the decades: “What is the other guy doing” or “Me Too”. Airlines typically  Follow the Leaders rather than Lead the Followers. Their dismal profits through the years reflects the Economic Myopia from which many have suffered. Creativity in Passenger ‘Flight and  Management Systems’ has been pathetic for the most part. Customer complaints to Government Aircraft Authorities evidence this fact.

While Business and First Class Passengers can enjoy  comfortable flights, Airlines install narrower seats in ‘Coach Sections’ on many aircraft. ‘More “Cattle” means more Revenue’ they extol amongst themselves (to the Physical Discomfort of those flying ‘Coach’).

If Middle East Airlines, for example, decide to “Level The Playing Field” and have ALL Passengers enjoying physically comfortable flights (rather than suffering  ‘Sardine Can’ experiences) their businesses will thrive; this, while other Airlines lose their customers.

Since many Airlines have Management which  lack Foresight, those few Airlines who improve the flight experiences of ALL passengers will have increased revenues (and not have to worry about the ‘slow thinking’ of other Airlines Management; the “Me Too’s”).

Reality.

Reference: http://www.albawaba.com/business/aviation-industry–545095

Cook Islands Seeks Inter-Continental Jet Service for Its Economic Growth

News Analysis:  Cook Islands Seeks Inter-Continental Jet Service For Its Economic Growth through an Airline Tender. Since it is located Half-Way between the Hawaiian Islands and New Zealand, travel by Jet Aircraft is most expedient. A Government Subsidy for travel to Los Angeles, California, is a present reality. An Airline wanting to expand itself into the Pacific may want to  consider these Islands.

The approximately 10,000+ people living in the Cook Islands are engaged in Black Pearl Exports, Clothing Manufacture, Copra Harvesting, and Citrus Fruit Production. To an investor, the aforementioned Products offer possible Import Opportunities to his or her Country ‘or elsewhere’.

Reference: http://www.cookislandsnews.com/2013/November/Wed13/other.htm#1311070802

Moscow, Russia, Seeks Investors for a New Airport

News Analysis:  Moscow, Russia, Seeks Investors for a New Airport  [of 40 Hectares (98.8 Acres)] which will help Alleviate Congestion at its three other airports. This new facility, which shall be Multi-Tasked [Passenger, Charter Passenger, and Cargo], will provide many Financial  Opportunities. Since it is intended to serve 10,000,000 Passengers and 25,000 Tons of Cargo per Year, Entrepreneurs with foresight can Extrapolate Possible Investment Rewards from the Airport’s magnitude. Hotel[s]’, Restaurant[s], Retail Shop[s], perhaps even a Aircraft Maintenance, Repair, and Overhaul Facility are apt Investment Possibilities at this Moscow location.

A big assurance to this Project’s Future Success is that President Vladimir Putin, a Man who does NOT Equivocate, supports its Development. Reality.

Reference: http://tinyurl.com/k2v7zh5

Qantas Airline’s Ticket Payment Innovation Benefits Its Customers

News Analysis: Innovative thinking by airlines such as Qantas can produce additional customers for them to serve. The new ticket payment process offered by Qantas is laudable.

Airline executives should realize: “Loyalty is a Two-way Street.” One must give it in order to receive it from customers. All too often, in order to satisfy shareholders, everything is done to cut all costs to maximize profits in the ‘short run’. Airline customers loathe this behavior since it is they who get the results: Discomfort in seating, lost luggage, poor or non-existent meals, poor service, and, tardy flights. These shortcomings hardly induce a feeling for loyalty to the airline. Long term maximized profits are brought about with satisfied returning customers.  They are willing to pay reasonable fares and who, as result of good treatment, select upgraded classes.

Reference: http://tinyurl.com/mdkp6mo

Airline Order Smaller Aircraft Passenger Seats for More Revenue

News Analysis:  The smaller seats, particularly in “Coach Class”, while allowing the airline to carry more passengers, increase customer dissatisfaction due to physical discomfort of the passenger seats. Since many airlines always ask: “What are the other airlines doing?” they follow the leaders [by installing narrower seats] rather than lead the followers [with installation of wider seats]. An innovative management of an airline should realize that passenger comfort is an important goal to develop repeat customers.  Rather than trying to put “many sheep in the barn” they should attempt to provide their customers with “Coach Class Comfort Second To None”. In the long term, those airlines will prosper with both repeat customers as well as new customers who are tired of being treated like sheep at other airlines.

Reference: http://tinyurl.com/kkccjd4