Recession

[galley princess]

So the big economic topic is the "impending", "looming" "ongoing" whatever recession that seems to be on everyone's mind. I don't know about anyone else, but I feel like I've been in recession since uh 2002 when my salary and benefits were gutted to the tune of 40%. Undoubtedly, we will see the non-negotiating company we work for start to whine about oil prices and falling demand in defense of their trying to keep us in poverty wages, but there is also a curiousity component to this.

Since assumably some of us have adjusted, albeit unwillingly to this environment, is the recession such a monumental event for airliners? On the bright side it's easier to non-rev during a recession, and hotels that aren't on the warning list on tripadvisor are suddenly willing to entertain interliners.

http://www.usatoday.com/travel/news/2008-0...ing-break_N.htm

This article cites the cost of airline tickets and the reactions of spring breakers. These are the current US customers of choice and why the rest of us are flummoxed by Tempe's antagonism toward our FFs. Notice they are now driving to their destination.

We might indeed see the kickback that has been coming to Tempe if these customers are indeed US's new base. I'm not convinced of that yet, so far the evidence has not been there, at any rate, for those of us already in recession going on six years, prices etc should now fall a bit for many items, since we're about to be joined by many others.

 

[N903AW]

http://www.usatoday.com/travel/news/2008-0...ing-break_N.htm

This article cites the cost of airline tickets and the reactions of spring breakers. Notice they are now driving to their destination.

Great. Carloads of intoxicated Spring Break College students driving the Nations highways. :down:

 

[FrugalFlyerv2.0]

Great. Carloads of intoxicated Spring Break College students driving the Nations highways. :down:

Natural selection will take care of them.

 

[vantheman63]

This is the exact reason in many ways I get so, so iritated with the media....

This "impending recession" they are willing on us is just maddening and silly.

If you will all pardon me, I keep hearing about this recession, but I've decided not to participate in it.

And let me tell you about this devistating, impending recession I've been watching happen...

On Airplanes - Try getting an F-Class seat on a CO flight....not gonna happen. You need to buy it. Wow, people are really not spending money.

Close to home - The wife and I needed new computers for the biz, along with new servers. We went shopping for HP...and gave up 30 minutes in....because their were SO few people spending money, the lines of people to look at machines were, like, 7 deep. Too many poor, recessive people.

At The Restaurants - At DelFrisco's in Fort Worth, TX...on a friggin Wednesday night....along with my dinner tab that hit 5-hundy for the 2 of us, there were SCORES of people suffering through a terrible recession...smiling, happy, eating, re-circulating money (that's a fancy way of saying "spending money.") It was just awful.....this recession is so bad already, that if you didn't have a reservation, you weren't going to be seated.....on a Wednesday night.

At The Banks - I still have no problem borrowing and leveraging....what a terrible recession.

Rental Properties - My properties are still full....and I'm getting asking price...what a terrible recession.

Wine Business - And finally, with this horriffic, terrible recession coming, I WROTE THE LARGEST SINGLE ORDER I'VE EVER WRITTEN IN MY CAREER MONDAY....for wine that is $70 a bottle....because, I guess people are really hurting right now.

At US Airways - This terrible recession has forced US to estimate losses...things are terrible....the employees are going to get beat again...making for a wonderful flying experience for the tourist traffic that flies for rock bottom prices only and expect F-Class service. Yes Mr. Parker, thank God this company has you leading it...telling yourself, your employee team, the investor community and all the media how bad everything is. Man alive, it really is bad out there.

Pardon me while I just ignore this media BS about the horrific recession that's coming. Pardon me if I chose not to participate....and pardon me for staying the hell away from US Airways while the management choses to not only participate, but leverage from it to get even cheaper everything. :down:

Pass

 

[autofixer]

I know this is NOT SCIENTIFIC; however, I drive I-85 GSO-CLT 3 or 4 times per week. In the last recession there was a noticiable drop off in truck traffic. I noticed the up-tick in truck traffic and the end of the recession, at least a month before the media reported it. Truck traffic is very strong and there has not been the noticable drop off, as of yet. The I-85 indicator says no recession!

 

[N965VJ]

The US Industrial Production Index was 114.1 in January, around where it was last summer. A true recession would show this falling in the same time period.

Now if some knucklehead politicians get in office this November and decide to tax businesses and “the richâ€￾, then we’re in trouble.

 

[FrugalFlyerv2.0]

The US Industrial Production Index was 114.1 in January, around where it was last summer. A true recession would show this falling in the same time period.

Also 1) the unemployment rate decreased last month, and 2) we haven't had 2 consecutive quarters of negative growth.

 

[galley princess]

Recessions don't hit everyone. The upper middle class, if their jobs are in needed sectors weather them pretty well, and indeed sometimes benefit from them.

As part of the airline industry, my point was that most of us have been weathering a recession going on six years. I'm just wondering what exactly will change for us. I would hate to see the newly recalled upend their lives for nothing, and as the industry shifts its dominos, there are actual humans attached to those dominos that will be affected. My financial background is woeful at best, that's why I pay a financial planner. I was just wondering if there were any viewpoints on what this "recession" could mean.

One thing is certain, the company not negotiating is nothing new.

 

[vantheman63]

Recessions don't hit everyone. The upper middle class, if their jobs are in needed sectors weather them pretty well, and indeed sometimes benefit from them.

I don't disagree with the point you're trying to make....but I would say this.

ANYONE, no matter who they are, who's on a "fixed income," that is, they receive a salary or a pay rate that is the same from one year to the next is absolutely vulnerable to a "recession." Higher level income people typically have a little more flexibility, unless they are mired with bad debt.

That being said, I believe that "recessions" are a mind set these days more then anything else. And the media plays RIGHT into it because they need to sell news....to minimize the recession they may find themselves in.

At the end of the day, "just say no" and chose NOT to participate in a recession...and find ways to manage through it....or be like Doug Parker and let the recession manage the airline.

I chose to manage my businesses and my personal through a recession....I chose NOT to participate. That's all.

 

[Be Careful What You Wish For.]

I chose to manage my businesses and my personal through a recession....I chose NOT to participate. That's all.

No disrespect intended, but you are taking an educated guess(gamble) to acknowledge/ignore what may or may/may not be coming?

What I am pointing out is that the current conspicuous consumption (which would be a lagging indicator) may not show what could be what lies ahead.

Your view is that everything is OK NOW-what do you forecast(if I understand you correctly everything will be OK no matter what)?

I hope so. Perhaps your business is recession proof. If not, would it not be prudent to plan for the worst and hope for the best?

 

[vantheman63]

No disrespect intended, but you are taking an educated guess(gamble) to acknowledge/ignore what may or may/may not be coming?

What I am pointing out is that the current conspicuous consumption (which would be a lagging indicator) may not show what could be what lies ahead.

Your view is that everything is OK NOW-what do you forecast(if I understand you correctly everything will be OK no matter what)?

I hope so. Perhaps your business is recession proof. If not, would it not be prudent to plan for the worst and hope for the best?

Absolutely no disrespect taken....I believe it's an interesting topic to discuss and debate....

I don't think I'm taking an "educated guess(gamble) to acknowledge/ignore what may or may/may not be coming." What I'm saying is three things...probably 10 more as well....but for starters:

1.) This so called recession has been forecast FOREVER by the media...hell, when Katrina hit, the headlines read, "will Katrina tip the US into a recession?" playing to fear and pandering to the negative side of human emotion.

2.) These so called recessions are nothing more then normal economic cycles...the economy CAN NOT GROW forever and ever and ever without at least some pause.

3.) The overwhelming majority of the good people out there, for the most part, have no real idea what a recession is or how it's calculated...just that USA Today says it's bad, real bad.

And, I'm certainly not insisting my business is "recession proof"....or that everything is "OK no matter what."

What I am saying is this:

-- It makes me sick to hear Mr. Parker and Mr. Kirby out there already encouraging the team to underperform in the name of the slowing economy.

-- I don't put much (if anything) into what the business section of USA Today or half the other, make that 85% of the other newspapers out there say.

-- If there is a contraction, SO WHAT?!?!?

And I s'pose I'd beg for your understanding that I certainly mean no disrespect....BUT I'M NOT PARTICIPATING IN THIS SO-CALLED, RECESSION THAT HAS BEEN FORECASTED (INCORRECTLY) FOR THE PAST 3 OR 4 QUARTERS!

I'm sorry Mr. Parker is pandering to a customer base that WILL be participating, fully...and that he's already broadcast to the great people of US Airways they they too will be participating....that's all.

But my mind and mentality doesn't work on "what if everything goes to hell in a hand basket." My mind says, "what do I have to do to manage through this and take advantage of the situation. And believe me, the 3rd Law Of Physics applies in a so-called recession as well: "For every action, there is an equal and opposite reaction."

And while I'm pontificating...I don't hear and see the CO and WN teams broadcasting how dificult and tough things are going to be...at all. I hear them say things like "softening demand" or "challenging domestic business." That to me says, "we need to be thinking a litle differently" not, "well, we have no idea what's going to happen because the economy will likely change."

Its this simple: Either I manage through this so called recession and make it work for me.....or it manages me and I'm at its mercy.

Thanks for understanding, my mind set is different...I'm not going to participate in it. That's all.

And I'll bet the ranch...and the cars...and the wine collection...I'll be doing my part to "re-circulate" quite a bit more $$$ into the economy this year vs. last. To your point, I don't believe I have a "recession proof business," but it will take the mother of all freight trains to keep my biz down vs. the previous year....

Sadly, for US Airways, the management team has already conceeded the year...and it's, like, February 23.

 

[AtlanticBeach]

Van,

I think this recession is very location sensitive and follows credit patterns. Northeast Florida is seeing entire neighborhoods wiped out due to predatory lending, just check out zip codes 32208 and 32209. There are also new developments where national builders have pulled up stakes with partially finished homes and half of the lots still unsold. This metro area is geographically large, with some people commuting more than 100 miles daily. Combine the higher gas prices with our Governor eliminating the free market for many insurance products and people don't have as much discretionary income. But we are fortunate as we have not seen any significant downturn since the 1980s. I guess we're due.

Texas will be counter to this trend since oil drives a lot of the higher end of the economy. Contrast that with my vendors who tell me the bottom has dropped out of their businesses in the past 45 days. But it may explain why CO flights are full in F. Oil money in Houston and New York businesses buying tickets for their employees will skew the marketplace compared to other carriers. An F airfare may not seem extravagent to an NYC based company but would shock people in other areas.

We are in complete agreement that recessions are a normal part of economics. The problem is that we have a significant portion of the population who have never experienced a real recession (or protracted global contraction of stock markets) and their fear of the unknown is fueled by the media. Again, we're in agreement.

The regional differences still remain. SunTrust in our region lost 24% of deposits in the past year. A combination of poor leadership and bad business decisions have sent business owners scurrying to other institutions. But, everyone is looking over every loan application with much concern than they have in the past.

My business is not recession proof. However when someone delays spending $100 with me now, it will cost them $800 next year or the following year to fix the same problem. So, our rebound is fairly substantial. In the interim, our raw products have gone up by 75% in the past year. So, unlike you, we look at alternate sources of income and delay certain expenditures until just before the beginning of the turnaround. I'm guessing mid 2009 for this area.

 

[vantheman63]

Van,

I think this recession is very location sensitive and follows credit patterns.

Agree Atlantic, with EVERY word you said/stated.

I would argue, the more "fixed" one's income is, the more challenge they will have navigating through what will be choppy waters until 2009. I would also argue, the more geographically centralized one is, the more challenging it could be. I have no idea what you do in your biz, but I agree with your Florida and Texas observations.

I think my comments are really less about some of the stuff that is happening and more about "buying into what people (in this case, the media) have to say and then managing in conjuction with it."

True enough, my biz is international in scope...I'm in the wine biz. European wines, if I were "locked" into that side of the business, might provide for me, a true "depression" as the exchange rate is killing those wines. I can move more toward Domestic wines...and I have. And it's working well.

I understand economic contractions (fancy words for recession), both domestic and internationally are real....but the manner in which they are delt with is the difference.

But I wouldn't disagree with a single syllable you typed....I would however, suggest the managment of US not concede to an economic recession and find a way to manage through the storm as opposed to just letting the storm roll over the airline. Make sense?

 

[AtlanticBeach]

Agree Atlantic, with EVERY word you said/stated.


But I wouldn't disagree with a single syllable you typed....I would however, suggest the managment of US not concede to an economic recession and find a way to manage through the storm as opposed to just letting the storm roll over the airline. Make sense?

Could be the first time ever that two posters have completely agreed on these Boards.

I also agree with you that US fails to bring a coherent economic strategy to the recession. They thought that adding seats last year would do the trick. The decreased space is driving the upper end of the revenue stream to OAs and they still can't fill those extra seats due to weight restrictions. (Not a new opinion for me. Was quoted in the paper more than a year ago on the exact same issue)

 

[orioleman]

Van,
I'm sorry Mr. Parker is pandering to a customer base that WILL be participating, fully...and that he's already broadcast to the great people of US Airways they they too will be participating....that's all."

Van,
The O-man and his little feathers family will NOT participate in this upper management scare tactic again........

I agree with you that Gloom and Doom Doug wants to try and scare labor all the while getting his dividend checks each month

and getting richer by the minute.. Sorry Doug . won't work with the east . We've seen that movie before.