Canadian Airline Sector in Downturn.

[Valcore]

http://www.reuters.com/article/marketsN ... dChannel=0

[Uncle Leo]

Didn't Doc start a post a year ago telling us 4 months until the music stops or something like that? Henny Penny was a little late, but maybe correct nonetheless.

[North Shore]

Surprise, surprise...one expert thinks that we're due for a downturn, and another one doesn't..

[bmc]

The industry at large anticipates an economic downturn over the next 24 months. Not only an issue in Canada.

[carholme]

Whether you believe there will be a downturn or not none of us can deny the Citibank report last week which stated an 07 last quarter loss of 9.89 Billions of US dollars on a writedown of 18 Billion, based mainly on the US sub prime mortgage market.

This means that those average guys like you and I who walked from their mortgages are on the streets in great difficulty and the fact that they cannot afford to keep the purchasing moving forward will have an effect. This effect is being felt all over the world and the lenders are starting to tighten the available credit market.
With the expected increases in the price of oil through the summer months, transportation can be expected to take certain hits.

carholme

[Hedley]

Timing is everything in life.

Doc is right - there's trouble coming. And it's more than
a simple recession. In addition to incredibly high oil
prices we are experiencing a financial instrument
meltdown. I really doubt anyone here cares why.

[pika]

Still over 300 jobs on flightglobal but it may be time to start thinking about grabbing a seat.

[MELd]

Anyone check out the market yet this morning?

[Stinky]

The economy is crashing. Aviation will be extinct within 10 years. Enjoy it while it lasts. I'm saving up to buy a farm and surround my property with barbed wire to stop the looting.

[2milefinal]

The economy is crashing. Aviation will be extinct within 10 years. Enjoy it while it lasts. I'm saving up to buy a farm and surround my property with barbed wire to stop the looting.

The only thing stopping me from me doing this, is my WIFE.


http://www.avcanada.ca/forums2/viewtopi ... &sk=t&sd=a

[F,D and H]

Hedley, since we are all a bunch of morons, please enlighten us.

[Hedley]

Please don't confuse a lack of intelligence with a lack
of education. One of the dumbest guys I've ever
met had a Phd.

Anyways, if anyone gives a sh1t ...

Remember the tech boom/bust, back in the late 90's?

Well, it was just another bubble that burst, like so
many have in the past. 1929, anyone? 1987? Bueller?

However, a guy called Alan Greenspan (US Fed Reserve)
decided to arrange a "soft landing" for the tech bust and
avoid panic & a recession by dropping the interest rate
to incredible, historic lows.

The gov't tries to help dampen the natural oscillations
of the economy by increasing the interest rate when
the economy is strong, and dropping the interest rate
when the economy is weak.

But Alan dropped the interest rate so far, that money
was essentially free, which created a housing bubble.
Enter greedy & opportunistic bankers ... apparently no
one had learned anything from this:

http://en.wikipedia.org/wiki/Savings_and_Loan_Crisis

After the tech bust, bankers offered really cheap mortgages
to people who couldn't afford them, with ridiculously low
introductory interest rates.

In the old days, it was harder to get a mortgage. You
had to be employed, the mortgage was limited to
a certain percentage of your salary, etc.

But not in the days of cheap money. The banks
would give anyone a mortgage.

Now, you're probably wondering why the banks
would undertake such risky mortgages. Bankers
are notorious for being difficult to get money
out of.

But these bankers knew they wouldn't hold the
mortgages. What they did was group a bunch
of these high-risk mortgages together, and sell
them off as bonds, which were bought by people
all over the world.

But the bonds were worthless, and criminally,
the bankers knew it. But they took the money
and ran. That's called fraud.

So, while everyone is shaking their fist at Martha
Steware and Conrad Black, the real criminals
are getting away with fraud on a trillion-dollar
scale - they make Enron look penny-ante - and
oddly enough, no one cares, which is bizarre.

The financial industry and the government know
exactly what is going on. I presume they are
just hoping that no one notices.

One can't help but wonder what the SEC was
doing during all of this. The politics of that
story - why the SEC turned a blind eye to
such gigantic fraud - would make very interesting
reading indeed.

But if anyone gives a sh1t about the economy, or
why they have a job, start reading here:

http://www.globalresearch.ca/index.php? ... a&aid=7413

P.S. I'm not an economist. I don't even have an
MBA. I'm just an engineer and a pilot that Transport
hates, so remember all of the above is worth
precisely what you paid me for it.

[marktheone]

Wow hedley. I'm impressed. You are well read it would seem.

[Hedley]

We are drowning in a sea of information. All you
need is a browser, and rudimentary knowledge of
google, and you can educate yourself.

P.S. I know dick about economics. If you want
to talk C or assembler (RTOS kernel, network protocol,
drivers) I can talk reasonably authoritatively there.

But at heart I am a defrocked mathematician,
with a fondness for applied physics. Click on:

http://www.pittspecials.com/etc/airspeed_g_radius.html

which brings us to the subject of "gates", or how
to safely perform low altitude aerobatics without
busting your *ss. But that's a different story.

[THEICEMAN]

Doc is right - there's trouble coming. And it's more than
a simple recession. In addition to incredibly high oil
prices we are experiencing a financial instrument
meltdown. I really doubt anyone here cares why.
Timing is everything in life.

Everybody calm down! I don't understand why everybody is talking financial meltdown...
This is the same attitude that forces people to sell or dump stocks prematurely, since they become a little nervous.

I would like to remind you, that we must analyze the economy in the long run. The market does not make sense in the short run! Unless you’re a technical trader....

There is no real indication for economic recession. Yes, it's true that the sub prime mortgage crisis has forced banks to be more conservative. But with the Federal Reserve lowering interest rates, the housing market will pick up!
Western Canada is going to be alright.....maybe eastern Canada might take a bit of a hit?

Look guys, just because the TSX drops 600 points.....don't start flipping out! The markets are entitled to bad days....in the long run, it would just appear as a little blib.

Oil prices maybe high, but the airline have adapted their cost structure to face these problems.
Keep in mind that the job market reflects upon the law of supply & demand.....even if the # of demanded jobs does go down, there will still be spots open since the # of pilots retiring will be at an all time high. According to stats I saw in the U.S, it will peak by 2014.....
I also saw on this forum that an average of 100 AC pilots will retire every year. If this is correct, then this cycle will continue.

[pika]

The original aeforum had the yearly retirement numbers at AC. Anybody have a link?