NegotiAAting Our Contracts..

[American Air Surf]

Labor, credit woes weigh on airlines - IATA exec

Wed Nov 28, 2007 5:16pm EST

WASHINGTON, Nov 28 (Reuters) - The financial turnaround at airlines, especially in the United States, would be at risk in 2008 if unions were too aggressive in trying to recoup wages and benefits lost in restructuring, the chief of the industry's leading trade group said.

"Unfortunately, as the industry shows even fragile profitability, labor starts to look for a free lunch. Already we've seen strikes from France to Japan," Giovanni Bisignani of the International Air Transport Association told an industry group on Wednesday.

"Several key U.S. contracts will be negotiated next year -- if labor pursues an agenda as an irresponsible adversary, our common future is limited," Bisignani said.

Globally, labor represents 23 percent of airline costs, down 5 percentage points from 2001 -- the start of a six-year restructuring accelerated by the Al Qaeda hijack attacks on New York and Washington.

During that period four U.S. carriers, United Airlines parent UAL Corp, US Airways Group Inc., Delta Air Lines Inc. and Northwest Airlines Corp, fell into bankruptcy and AMR Corp, parent of U.S. leader American Airlines, nearly sought protection from creditors.

Bisignani also worries that U.S. carriers could have a hard time upgrading their aging fleets due to general economic uncertainty and continuing credit woes where debt remains high relative to cash flow.

"Lenders will be cautious and even if orders are placed today, production lines at Boeing and Airbus are virtually full for the next three years," Bisignani said.

About a third of the U.S. fleet is more than 25 years old, reducing the cost advantages of depreciation and heightening the impact of fuel costs since older jets are less efficient than the newest models.

IATA is poised next month to revise the industry's outlook to account for oil prices now pushing $100 per barrel. In September, the group projected 2008 profits of $7.8 billion, but the forecast was based on oil at just under $70 a barrel.

International carriers, especially in Europe, worry about U.S. credit market turmoil because of the potential impact on financing conditions and corporate travel. Premium travelers -- usually business customers -- account for 25 percent of traffic aboard the top-five European airlines on transatlantic flights, compared with 15 percent for the leading U.S. carriers, IATA figures show.

"That translates into a 30 percent yield premium for Europe," Bisignani said. (Reporting by John Crawley; Editing by Braden Reddall)

So....Where does this leave lAAbor? Not much leverage, woud be my guess, in NegotiAAtions- The BIG boy(s), already got their paydays, well ahead of the curve. LAAbors problem(s) lie, with that damn NLRB/NMB, and no teeth, with a No Strike clause- Courtesy of the same folks that run our government, and have allowed the current "economic" turmoil that is occuring, and the "devaluation" of your dollar which continues to buy less and less...- The History of Money, is a good primer-

http://www.financialsense.com/fsu/editoria.../2007/1020.html

Now you know...... :angry: :unsure: :huh: :blink:

 

[lpbrian]

The economy is not slowing.

 

[American Air Surf]

The economy is not slowing.

Hmmm, You must be a Bush appointee, ...and ignorance is bliss. The world is falling around you, and you don't even know it. "It is best to learned, but with all your learning gain wisdom and understanding" Do your home work...

Housing Free Fall Turning into Meltdown...2007 Recession Ahead
Nouriel Roubini | Nov 17, 2006

For the last few weeks and months I have been writing dozens of detailed notes and blogs (see my latest here) rebutting the utter nonsense that has been spewed - based on little or no data - on the alleged bottoming out of the housing recession. Even Alan Greenspan - the allegedly careful reader of macro data - had joined this cheerleading clown show and the NAR spin of half-lies that "we are near the bottom of the housing recession". The actual data that were coming out of the housing market in the last few weeks were clearly inconsistent with this cheerleading non-sense and spin. So, maybe these delusional optimists will now shut up for a while and listen to the numbers after today's announcement that housing starts fell over 14% last month and that they are now at their six year low. Even worse, building permits, that are THE leading indicator of future housing activity, fell further by 6.3% and they are now at their lowest level since 1997.

And even at these low levels of permits and housing starts the housing sector is nowhere near its bottom. In previous housing recessions, housing start fells as much as 40% to 50% from their peak; so, with starts now being only 27% down, the housing bust has still a very long and ugly way downward to go. And lower permits today mean lower housing starts ahead, and lower starts mean lower construction and lower construction means much lower construction jobs; expect over 800K jobs to be lost in housing in the next year.

So beware of the new spin that you will hear soon claiming that, with starts now down 27%, the bottom of the housing bust is near; building permits and housing starts are likely to fall at least another 20% in the next 12 months before any bottoming out of the worst housing bust in the last five decades is reached in 2008.

And in spite of lower starts the glut in the housing market is getting much worse (not better as delusional optimists are spinning it): indeed the completions of current housing projects will dump another huge mass of unsold homes into the market in H1 of 2007 at the time when the speculative demand for housing ("condo flipping "investments) is collapsing and the fundamental demand for housing is collapsing too as the economy spins from a sharp slowdown into a recession. As I predicted last summer real home prices are likely to fall at least 30% in the next 3 years; and new home prices are already falling at a 10% annual rate. They will fall much more as the 90% increase in real home prices since 1997 was a massive speculative price bubble based on little fundamentals.

And now the housing recession is spreading to non residential construction. Until Q2 non residential construction investment was strong but it was only half the size of housing; but by now it is clear that non residential construction is also completely stalling; the figures for total construction spending for September show a sharp fall in residential construction and a stall of non residential construction. The reason for this contagion from residential to non residential construction is obvious: since we have now entire "ghost towns" in the West (a term used by SF Fed Prez Janet Yellen to describe many housing developments that are empty in the West) no one is going to build stores, shopping malls, shopping centers/strips, offices near these "ghost towns". Indeed, as reported in a recent lead article of the WSJ, a McGraw Hill Construction study forecasted sharp drops in non-residential construction in 2007 as lower housing leads to lower non residential construction. Indeed, the October figures for construction employment already show a fall of 26K, a fall that will accelerate in the next few months as housing construction now under completion is completed and then new starts will become sharply lower.

So, the housing recession is now becoming a construction recession; and the construction recession is now turning into a clear auto and manufacturing recession; and the manufacturing recession will soon turn into a retail recession as squeezed households - facing falling home prices and rising mortgage servicing costs - sharply contract their rate of consumption. As I have predicted since July a recession in 2007 (as early as Q1 or at the latest by Q2) is now highly likely to occur. Expect the Fed to slash the Fed Funds rate as early as January and expect this Fed easing to fail to prevent the 2007 recession as the glut homes, autos, consumer durables will make the demand for these totally insensitive to changes in interest rates. The Fed easing in 2001 failed to prevent the 2001 recession and the Fed easing in 2007 will also fail to prevent the 2007 recession. Also expect this sucker rally in equity to continue for a while into the end of 2006 as expectations of a Fed easing will lead to the delusional hope that such easing will prevent the 2007 recession. But once the signals of a recession are clear to all by the beginning of 2007 expect, as in previous US recessions, for the stock market to experience a sharp contraction; as detailed in my research work, in the typical US recession the S&P500 has fallen by an average 28%.

The burden of the proof that we will not experience a hard landing recession in 2007 is now in the hands of the soft-landing optimists...

*****IF YOU WISH THE CORBORATING LINKS, WITHIN THIS BLOG, BY ALL MEANS CLICK HERE....
http://www.rgemonitor.com/blog/roubini/158194

 

[HARDWORKINGAIRLINEWORKER]

I smell recession.

 

[Winglet]

And what would you expect these pirates at the ATA to spout-out? The truth? Screw-em. Their cost are going up. Their 25 million dollar a year CEOs can figure it out and might even have to personally skim a few million less from the corporate coffers. I'm fed up. My response? . . . F-you. Pay me.

If not, shut the whole thing down when and where they are. The CEOs can pay extra to fly 'em to Mojave.