Crisis en Canarias

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British Airways anuncia el fin del boom del bajo coste

Posted by juanjesus en mayo 23, 2008

El ministro de economía británico ha reconocido que nos encontramos ante una crisis económica (Telegraph: Baroness Vadera: We face economic crisis) al tiempo que el petróleo mantenía su tendencia alcista (El Mundo: el petróleo dobla el precio de hace un año). Independientemente de que el precio del crudo oscile nuevamente hacia precios inferiores (aunque, probablemente, para recuperar posteriormente esa tendencia alcista que se ha iniciado desde hace más de 5 años), el problema del coste actual está haciendo mella sobre industrias muy sensibles, como la aérea (El Periódico: El combustible hace tambalear a las aerolíneas tradicionales).

Ya se están dando situaciones de suspensión en la programación de vuelos, descenso (en el Reino Unido) de la demanda, y posibilidad de quiebra de varias aerolíneas en los EE.UU.

Por su parte, el director de British Airways se ha apresurado a anunciar el “fin del boom de las líneas de bajo coste” The Guardian: Cheap flights boom over, says BA chief as oil hits new high), al forzar a subir tarifas aéreas, generando importantes tensiones en los costes de combustible de estas compañías, a pesar de que algunas de ellas han hecho importantes compras de futuro de queroseno a 80-90 dólares en los pasados meses, garantizando por el momento una menor repercusión de los precios sobre su cuenta de resultados.

New York Times ha anunciado que varias compañías aéreas se encuentran a las puertas de graves problemas financieros New York Times: 9 Airlines Face Threat of a Credit Downgrade ).

 

¿Podemos hablar de una nueva era en el transporte aéreo? Sí, de consolidarse estos precios, lo que parece probable, al decir del geólogo Chris Skrebowski en la BBC: que estima que ya hemos alcanzado el techo de producción del petróleo ligero, barato y de bajo contenido en azufre, lo que hace que el queroseno de aviación esté teniendo una gran presión en su demanda y precio.

The Guardian: Cheap flights boom over, says BA chief as oil hits new high

· Fears in US over shortages sends price to $135 a barrel
· Budget airlines face fight for survival, Walsh warns

Britain‘s leading airline boss declared the era of cheap flights over yesterday as the price of oil hit a record high for the third day running.

Willie Walsh, the boss of British Airways, said the soaring cost of oil allied to global economic uncertainty would force airlines to raise fares in a scramble for survival that will see many of them go bust.

After a day of heavy trading oil rose to $135 a barrel as fears over supply shortages in the US sparked more buying. A year ago a barrel of oil cost just $65 but the price has risen relentlessly, driven by demand from developing countries and speculation on the world markets.

The soaring cost of fuel is also having a painful impact on the wider economy and brought renewed calls yesterday for the government to scrap rises in duty planned for the autumn as motorists face increasingly steep increases in the cost of filling their tanks.

The AA said drivers would pay more than £110m more on fuel over this weekend’s bank holiday than over the same period last year. Average petrol prices have risen to 112.5p a litre while diesel costs an average 124.2p.

A day after the world’s biggest carrier, American Airlines, announced huge cuts in routes and jobs because of the rising oil price, Walsh said budget airlines would have to increase fares and add-on charges such as baggage check-in fees and that many unprofitable companies would simply go bust. “The industry has no future if it does not price in its costs.”

Asked if cheap fares for customers who book flights far in advance will disappear, he said: “My view is yes,” before issuing a warning to low cost carriers Ryanair and easyJet, who rely on low ticket prices to pack out their aircraft.

His prediction will mean the end of a golden era for consumers who have become used to cheap flights to cities all over the globe and which has revolutionised the travel industry by putting hitherto unheralded destinations such as Jerez and Tallinn on the tourist map.

“If these prices are not available it will not encourage people to take short trips,” said Walsh.

He added that many airlines would not survive a life-threatening combination of expensive fuel and a drop-off in demand as passenger numbers decline due to expensive fares and dwindling consumer confidence.

“This is about whether airlines can survive. If you look at a lot of the low-cost carriers around Europe, a lot of them have not been able to make money when oil was $80 per barrel,” he said.

Despite announcing record profits last year, BA is expected to lose money over the next two years as its bottom line is wiped out by the oil price. Walsh confirmed that, as well as raising its fares, BA will cut thousands of flights this winter as its drops its least profitable routes and grounds its oldest, most fuel-thirsty planes.

The BA chief executive also refused to rule out another hike in fuel surcharges, which are levied on customers to cover the rising cost of oil and already add £158 to the cost of long-haul return flights. “It could be [a rise in] fares, it could be surcharges. Or it could be a combination of both,” he said.

Fuel accounts for around a third of airline budgets and its escalating price is forcing airlines to pass on the cost to consumers because they are running out of overheads to slash in their own businesses.

The cost of fuelling a transatlantic flight, the most profitable part of BA’s business, has quadrupled since 2000 to $44,000 (£22,200).

EasyJet admitted this month that its costs had risen by £4 per customer due to higher fuel prices – an increase that it is struggling not to pass on in fare increases.

Budget airlines led by Ryanair and easyJet are mitigating the increase by charging higher fees for checking in bags and priority boarding passes. Their business models are predicated on packing their planes with passengers through very cheap fares and then generating extra profits through charging those customers for add-ons such as baggage check-ins and car hire deals.

Analysts have warned that high fuel costs spell the end of the cheap flights boom, which has taken Ryanair from a provincial carrier to the world’s most profitable airline, but is now under threat due to fares pressure and falling disposable income.

“All we have done is factored in the oil price. We have not even factored in a consumer slowdown yet. The real problem is the price sensitive consumer. What happens to them when they push their prices up,” said Andrew Fitchie, analyst at stockbroker Collins Stewart.

An easyJet spokesman said fares would be kept low in the short term because there were too many European budget carriers. However, many of those airlines would go bankrupt over the next year, allowing the likes of easyJet and Ryanair to raise fares in order to accommodate fuel costs.

New York Times: 9 Airlines Face Threat of a Credit Downgrade

By MICHELINE MAYNARD

Published: May 23, 2008

In the latest sign that the outlook for the airline industry is darkening, Standard & Poor’s Ratings Services on Thursday placed nine big airlines on CreditWatch with negative implications, meaning that it was likely to cut their debt ratings.

A senior credit analyst with S.& P., Philip A. Baggaley, said the action was taken because of “potential severe financial damage” that could result from record fuel prices. In total, 10 airlines, including all the major carriers, are now under the CreditWatch negative designation.

The price of jet fuel has risen 82.5 percent in the last year and 10 percent in the last month, making it the single biggest expense for the airlines. If the price does not moderate, Mr. Baggaley said one or more of the major airlines might need to seek bankruptcy protection by 2009.

“All of them have a decent amount of cash,” he said, “but with the scale of losses that may occur, they could burn through that very quickly.”

S.& P.’s action affected American, Continental, Delta, Southwest, United and US Airways among the biggest carriers, and AirTran, Alaska and JetBlue among the smaller ones. Northwest was put on CreditWatch negative after it announced plans in April to merge with Delta.

Executives at the ratings agency plan to meet with officials at each airline and will act on debt ratings quickly.

Airlines have started a series of fare increases, fuel charges and new fees in the last few months. On Wednesday, American said it would charge some passengers $15 to check their first bag. None of the other airlines have yet followed suit.

However, Mr. Baggaley said the airlines risk alienating passengers more by the fees than if they simply raised ticket prices. This is only the third time that S.& P. has placed so many airlines on CreditWatch negative. The first was in 1992 during a series of price cuts that led to fare wars. The second was after the September 2001 attacks, when airlines grounded planes and laid off more than 100,000 employees.

Mr. Baggaley said he was concerned that if carriers filed for bankruptcy again, some could ultimately be forced to liquidate because they have already reorganized and have little more to trim.

“What is in some ways scarier about this situation is that most of the airlines have relatively few unencumbered assets,” Mr. Baggaley said. “If they go through their cash, there’s not much to fall back on. They’ve cut costs and restructured so if they go into Chapter 11, there’s a greater risk they might not come out.”

The Independent: Airlines in a tailspin

As oil prices soar, some airlines are playing a ‘last plane standing’ game, waiting for better times and hoping that rivals go bust first. Others are raising fares and slashing routes. By James Moore

Friday, 23 May 2008

The black cloud hanging over the airline industry became even darker yesterday as Air France and Qantas became the latest carriers to add to the chorus of gloom surrounding the industry.

The French national carrier indulged in a touch of understatement that could have been British when it said it expected the current year to be “challenging” with the global economy stuck in a deep rut and oil prices hitting fresh highs every day.

Downright awful would have been a better description as Europe’s largest airline was forced to report a loss of €542m (£430m) for the three months ending 31 March, compared with a profit of €44m the previous year.

What is worse – from an industry perspective – is that Petercam analyst Thijs Berkelder pointed out that despite Air France’s gloomy outlook, it is in rather better shape than most of its rivals. “They can keep a profit while others will dive into losses,” he said, as the group said it expected operating profits to fall by nearly a third to €1bn in the coming year. Air France does, at least, have a young fleet of fuel-efficient aircraft and synergies it can extract from its merger with the Dutch carrier KLM to cushion it. Others lack these advantages.

To ram the point home the Australian carrier Qantas raised ticket prices for the second time in less than a month, while Japan Airlines, Asia’s biggest carrier, said it would have to raise its fuel surcharge. It came just a day after American Airlines’ announcement that it planned to slash capacity.

It’s not hard to see the reason – oil prices smashed through the $135-a-barrel barrier yesterday, and even those with hedges in place will not be able to avoid the reality of $100-plus a barrel oil prices for ever. BA yesterday could only point to its release when it said profits would be hit by £18m for every $1 the oil price rises. That suggests that despite actively hedging, it is probably now losing money, and will continue to do so without taking further action.

So what can the industry do to adapt to the new reality? And has it really woken up to the challenge it faces? The Deutsche Bank analyst Chris Reid thinks not. In a recent note he castigated the industry for indulging in a “last plane standing strategy” – hoping that rivals will eventually go bust and they will be left sitting pretty when energy prices start to fall.

That won’t be anytime soon if you listen to oil analysts. Tristone Capital, the energy specialist investment bank, for example, believes prices will be above $100 a barrel for the next two years at least. And if prices keep on rising, that view – still seen as relatively bullish – could actually prove to be conservative.

In his report, Mr Reid says: “Virtually all the airlines we cover have the same strategy to deal with a rising fuel cost base and downside risks to demand. They all plan to “wait out” the downturn such that either fuel prices will come back to acceptable levels or competitors, suffering more, will go bankrupt first.” He argues that airlines will have to slash growth plans and costs and/or sharply increase fares.

So does Douglas McNeill, air analyst at Blue Oar Securities. He says: “There are various things they can do. We have seen American Airlines announce that it was going to make massive cuts as it seeks to winnow out those routes that are unprofitable. BA has indicated it will do something similar, while easyJet will be retiring some less fuel efficient aircraft.”

Ryanair, says McNeill, has quietly increased prices, although it has always adamantly insisted that it will not impose fuel surcharges, but also, innovatively, has started offering its website as a vehicle for advertising, allowing people to promote their holiday villas, for example.

Other wheezes cooked up by various airlines include charging for things that were once a part of the ticket, such as food, baggage, priority booking, etc. These are not things the low-cost carriers can resort to, however, because most levy some sort of charge for these already.

Then, says Mr McNeill: “There is consolidation. But when you get down to it, they are all mitigation to what is a much more fundamental problem, which is the price of fuel.”

He argues there are two real options: “To file for insolvency, and we will see an increasing amount of that after cashflow starts to fall when the seasonal pick-up from summer bookings come to an end. The other option is to put up prices and hope customers will wear it. This is something the network carriers with a high share of business traffic are already doing, but there is already some evidence that the low-cost carriers have reached the limit.”

Ultimately, what these people are really saying is that airlines are going to have to completely reassess their business models to adapt to the new reality because high energy prices are most likely here to stay. And the upshot is that consumers are going to have to pay more for less, or simply not fly.

Much has been written about how the era of cheap food and fuel is coming to an end, with a tough decade to come. Those who still have cash to spend on holidays when those price rises have been absorbed are going to find that the era of cheap air travel has come to an end also.

Perhaps it is now time for the greens to start cheering. Because there aren’t any smiles in aviation any longer.

Telegraph: Baroness Vadera: We face economic crisis

By Robert Winnett, Deputy Political Editor

Last Updated: 3:25AM BST 23/05/2008 |

Britain was facing “the first real economic crisis” in a generation, a senior Government minister has admitted.

Baroness Vadera, a business minister and former adviser to Gordon Brown, made the comment as the price of oil experienced its biggest one-day increase in almost 20 years.

The minister said the economy was facing “testing times” but insisted that Britain was well-placed to withstand the global turbulence as fuel and food prices rose sharply.

World oil prices jumped by $5 a barrel on Thursday – the single largest rise in a day since the first Gulf war.

Last night it stood at a record high of more than $135 a barrel, more than double what it was last year. The future price of oil has also risen sharply, leading to warnings of high petrol prices for the next eight years. The average price is currently 126.35p per litre for diesel and 113.98p for petrol.

Several airlines have warned that they will have to increase prices and cut flights in response to the high oil prices. Consumers were also told to brace themselves for big rises in energy bills, with wholesale gas and electricity prices more than 80 per cent higher than last year.

It means that the average family faces a £650 increase in petrol and energy bills this year.

A study will reveal that millions of drivers are cutting back on car travel due to the sharp increase in the cost of motoring.

Almost two thirds of the British public have been forced to cut spending and make a “conscious decision” to travel less by car – with the over-65s particularly badly hit.

Almost half of the population has cut back on other areas of spending such as eating out, entertainment and the weekly shop to meet the higher driving costs.

The impact of the rising cost of motoring has been uncovered by the AA, which surveyed 17,500 people last month – before the latest round of price rises.

Yesterday, the AA, which has more than 15 million members, wrote to Alistair Darling, the Chancellor, urging him to reconsider planned increases in tax on fuel and cars. It is supporting a Daily Telegraph campaign calling on the Government to offer motorists a fairer deal.

Edmund King, the president of the AA, said Mr Darling should consider appointing an oil regulator to study the market. “People are having to make quite big decisions about changing their whole lifestyles because of the high fuel price,” he said.

“Planned tax rises should certainly be abandoned but we would also like the Government to consider appointing an oil regulator.

“There is concern over whether consumers are getting a fair deal at the pumps. The price of oil is so essential for the country as a whole that ministers should intervene.”

The Treasury has said that it understands motorists’ concerns and the Prime Minister has said he will push Opec nations to increase oil production.

Yesterday, speaking in the House of Lords, Lady Vadera said: “We are facing a testing period in the economy. We are facing the first real international economic crisis of globalisation.”

She said it was an “uncomfortable situation”.

However, Alan Duncan, the shadow business secretary and a former oil trader, said that the Government’s strategy was misguided.

“The sight of Gordon Brown begging Opec to raise production is a humiliating spectacle for this country,” he said. “He simply doesn’t understand oil markets and should know that Opec can’t just turn on the taps.”

The AA survey found that 64 per cent of respondents had cut spending and made a “conscious decision to travel less by car”.

Thirteen per cent had reduced spending on eating out and entertainment and 12 per cent had cut back on their weekly shopping.

More than a third were cutting back on driving, with 51 per cent of those aged over 65 reducing their car use.

The research was conducted last month and the AA suspects that the situation has deteriorated even more following further increases in fuel prices.

Separate research released by the Institute of Advanced Motoring Trust revealed that the cost of fuel for a typical family break had risen by 50 per cent over the past five years, despite modern cars squeezing about five per cent more miles out of every litre of fuel. The sharp increase is expected to deter some people from going away over the forthcoming bank holiday weekend. Some of the biggest increases have been in diesel prices, wiping out the benefits of owning fuel-efficient cars.

The Daily Telegraph is calling on Mr Brown and Mr Darling to abandon a planned 2p increase in fuel duty this autumn. The campaign is also pushing for proposed increases in vehicle excise duty next year to be scrapped. Nearly 40 MPs, including several former Labour ministers, have now signed a Parliamentary motion calling for the VED changes to be reconsidered.

Lindsay Hoyle, a Labour MP, said yesterday: “People have to be able to afford to use the car. It’s continuing to have an effect on people’s pockets. I want to see the escalator abandoned.’’

He also called for a windfall tax on oil firm profits.

Yesterday, airlines said the high cost of oil was likely to lead to flights and jobs being cut.

Gerald Arpey, of American Airlines said: “The airline industry as it is constituted today was not built to withstand oil prices at $125 a barrel, and certainly not when record fuel expenses are coupled with a weak US economy.

“Our company and industry simply cannot afford to sit by hoping for conditions to improve.”

Philippe Calavia, of Air France-KLM: “We see a downsizing trend in the industry, and there’s a real risk that capacity will contract.”

Are you cutting back on car travel?

El Periódico: El combustible hace tambalear a las aerolíneas tradicionales

 Iberia cae un 4% en la bolsa, Air France un 10% y American Airlines reduce flota

J. CAÑETE BAYLE / WASHINGTON
S. SABRIÀ / BARCELONA

Las compañías aéreas tradicionales, con vuelos en red y de larga distancia, son las empresas más castigadas por el encarecimiento de los carburantes. Ayer, Iberia lideró las caídas del Ibex 35, con un descenso del 4,04%, aunque la superó con creces Air France-KLM, que acabó el día con una caída del 10,24% tras anunciar sus peores resultados de los últimos años.
Ante esta evolución de los negocios, los responsables de las aerolíneas están empezando a tomar medidas drásticas. El presidente de Air France-KLM, Jean Cyril Spinetta, afirmó que la compañía se centraría en los próximos meses en “solucionar sus problemas internos” y que abandonaba cualquier proyecto de crecimiento externo, lo que supone dejar de lado definitivamente la posible compra de Alitalia.
Spinetta recordó que cuando su compañía se planteó esa posible fusión, el precio del barril de petróleo estaba en 86 dólares, y ayer alcanzó los 135. El presidente puso en cifras el efecto de esta subida: en el ejercicio 2007-2008, cerrado el pasado 31 de marzo, el resultado de explotación aumentó el 13,3%, hasta 1.405 millones de euros, pero los beneficios cayeron un 16%, hasta 748 millones, y la previsión para este ejercicio es que el resultado de explotación solo roce los 1.000 millones. Ante el incremento de costes, una de las medidas será frenar el ritmo de aumento en la oferta de plazas, del 6% anual previsto a solo un 4%.

PLUS POR LA MALETA Otras compañías han optado por soluciones más drásticas, como American Airlines, que ha anunciado un plan de choque. Su consejero delegado, Gerard Arpey, lo justificó así: “La industria aérea estadounidense no fue pensada para un barril de petróleo a 125 o 130 dólares”. La medida más inmediata y que más notarán los consumidores es que American se convierte en la primera aerolínea estadounidense que cobrará un plus (15 dólares por trayecto) por facturar una maleta. Hasta ahora, las aerolíneas cobraban extra a partir del segundo bulto facturado, una decisión que se tomó recientemente precisamente a causa de la crisis originada por el precio del petróleo. Además, American Airlines tomó la decisión de reducir sus vuelos entre un 11% y un 12% en el último trimestre del año, lo que implicará la reducción de hasta un 7% de su plantilla, lo que equivale más o menos a 5.000 empleados.
El núcleo del negocio de las compañías tradicionales son los viajeros de empresa que utilizan los vuelos regulares. Las aerolíneas temen que si se disparan los precios, este público viaje en low cost, otros medios de transporte, o renuncie a los desplazamientos.

 

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