Where do you see Commercial Aviation headed?

Kirok

Newbie
Jan 30, 2009
2
0
Hi folks,

Just a general opinion question, but where do you all see commercial aviation going in say… 5, maybe 15 years? For those of us who still believe there is money to be made in that sector of aviation (lol), I was just curious what others thought.

Specifically, my worry is the yo-yo’ing of fuel pricing and availability. Does anyone know of any new ventures RR or GE is heading towards perhaps natural gas or bio fuels for jet engines? I knew Continental had some successful tests with bio-fuels last year, but wasn’t sure if it was going to be implemented or not.

Have any carriers addressed this impending fuel issue yet?

Thanks for the feedback!

Kirok
:up:
 

BoeingBoy

Veteran
Nov 9, 2003
16,512
5,865
The airlines are dependent on the regulating authorities when it comes to biofuel. I recently read that a specification had been set for 50% bio/50% petroleum based jet fuel with the bio portion produced by certain bio stocks using a specific process. Work is advancing on specs, with the goal of having specs for 100% biofuel by 2012.

Availability of fuel is usually not a problem, absent some shock to the supply chain. The hurricanes that disrupted drilling rigs, refineries, and pipelines on the Gulf coast caused the last big disruption and led to spot shortages at some airports. Obviously, some united action by OPEC (or even individual countries that produce lots of crude) to sharply curtail production would be felt by the airlines.

Price is relatively benign right now, after the spike up in the summer of 2008 followed by the sharp drop in late 2008. Nothing would prevent another sharp spike in fuel prices, but with demand down it's unlikely until after the global economy recovers.

The airlines are doing what the always do - adapt to the economic environment as best they can while still losing money in bad times and making money in good times. Some combination of capacity adjustments, fare levels, and the latest invention of "ancillary fees" (additional fees for what used to be included in the fare) are the usual levers that airlines pull to make adjustments. Plus there always a move to raise cash (issue debt and/or sell stock) in bad times as losses decrease the cash on hand.

Jim
 

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