airlines are dead, as in toastada. no combination of palm oil and fuel efficiency will save them.

Say, what about oil from French fries, and maybe we can capture bovine gases and reduce global warming at the same time? :)

Well done Cameron,

This is a very informative post and the data for the graphics must have taken some effort to assemble. Thanks so much.

Airlines provide a transport service which has several distinguishing features:

- Speed. The time-saving for lengthy journeys is considerable compared to all other alternatives.

- Range. Having out-competed long-distance passenger shipping, air travel now moves the vast bulk of long-distance passengers.

- Flexibliity. Airliners can fly wherever there is demand. They can establish new routes and capacity very quickly compared to road/rail. They can hop over unpleasant or dangerous regions altogether. Airliners can still make money on "thin" routes - one plane a week, carrying a few dozen passengers, etc. Services can also be reduced rapidly and the airliners moved elsewhere without tears, compared to say rail.

So for these reasons there'll always be *some* demand for airlines - unless society collapes completely. (Back in the 1930s the cost of a flight from Australia to Britain was the equivalent of around 10 times the 2008 Economy Class fare, but government mandarins, business leaders and the rich valued their time enough to make it worthwhile.)

Up until now, cheap jet fuel has allowed an exponential expansion in mass tourism and has also enabled easy business travel/commuting, family visitation, overseas education and migration, etc. While there appears to be no future for a large proportion of this demand once fuel costs increase sufficiently (and telecommuting, SKYPE etc. are waiting in the wings as serious competitors), remember that airlines can respond to this demand reduction by quickly reducing their capacity. (Sacking workers, scrapping planes; it's harsh but effective.)

So airlines as an industry will survive unless they take their eye off their revenues and costs. They'll be leaner, probably with more emphasis on efficiency, less choice of schedules and a lot of company mergers, but while liquid fuels are still being produced, there'll still be at least some air transport.

On the other hand, the latest Super-jumbo aircraft such as the Airbus A380 may ironically become extinct despite their low fuel consumption per passenger. They may prove too big for the thinning demand for air travel as fuel prices increase.

You're the first comment to mention videoconferencing. I know with humans being a social animal, nothing will ever replace a personal visit, but videoconferencing and distance learning will have to pick up the slack as air travel becomes less and less affordable.

Irony : my company (a big European IT service company) just won a contract to manage videoconferencing for ... Air France!

Shhh! Don't tell the clients. Might give them ideas.

On the other hand, the latest Super-jumbo aircraft such as the Airbus A380 may ironically become extinct despite their low fuel consumption per passenger. They may prove too big for the thinning demand for air travel as fuel prices increase.

I really don't understand your reasoning here. On the intercontinental hub routes (e.g. London<>Bangkok) the A380 will rule. OK, the seat price may have to rise to all-business class fare levels and above and they will be packed in like sardines and only fly once a month but the very efficiency of the beast will ensure it is the cheapest option for these routes...

Nick.

I'm not a finance person, but given the huge capital costs of that beast, who could afford to fly it once a week? Just imagine the interest payments on a $330M plane. Maybe if it were sold at a steep discount in a bankruptcy auction.

I predict a total collapse of domestic flights on all continents, since these could be replaced by high speed electric rail - journeys would take longer, but should cost considerably less (why is Amtrak the international exception), also trains should be much more comfortable than cramped airline seats.

With regard to inter-continental flights; the number of carriers is likely to fall to just one per nation, with some countries not bothering if a boat to the nearest continent is practicable.

I agree that a jet like the A380 needs to spend 99% of its time in the air, and that, for example, one flight a month between London and New York is not going to be sustainable. However, one flight a month (or week, or whatever interval) for the route does not also mean only one flight a month for the jet.

I am much more interested in the relationship between the price of oil and the level of personal disposable income. As the price of oil rises, one would expect a fall in the number of passengers able/willing to buy tickets.

Also, what is the split between ticket revenue that is business and non-business. Is it reasonable to assume that businesses will be tightening their belts just as much as individuals?

At what price point do people start, en masse, to abandon SUV's and privately owned light aircraft. I read yesterday that some SUV's have depreciated more than 25% in the first quarter of this year, and in some cases the depreciation has been more than is expected in an entire year. Is the same true of light aircraft and small speedboats?

There is a dividing point between the truly wealthy and the rest of us. My guess is that the majority of people that can afford a light aircraft or luxury boat, are not that worried about the price of gas, and will only vacation 4 times a year instead of 6. Unless there is a real depression and their source of revenue bites the dust.

Maybe if it were sold at a steep discount in a bankruptcy auction.

This is a time-honored way of taking debt off the books. The companies that put the satellites for satellite phones up went bankrupt; the companies that took over were relieved of the debt and thus had a lower cost structure. I haven't checked on this story in a while but the replacement companies were better set up to make a profitable business of it than the original company.

Giddaye Nick,

Surely (and I keep going back to this) the people that begged, borrowed and stole to get these things into production are not idiots. Surely someone along the line must have placed PO (or at the very least made some effort to estimate fuel prices in 20008 and beyond) in the "against" box.

It's so difficult for someone like myself to believe that the investors loaning out the trillions are that naive.

Regards, Matt B

Oh, believe it, Joe Average. Perhaps not so much naive as incredulous that oil could ever get really scarce. You don't believe they could be ignorant and they don't believe that no-one will fix this.

I don't think many businesses plan for contraction; most look for ways to grow. maybe an A380 represents a way to get costs down, if they can fill them. Now they have to figure out how to fill them. Frequently.

Just heard the President's comment to urgently grab two and a half years crude supply (for the US) in sensitive coastal areas - if ten years to actually get it out can be called "urgent". Two and half years worth... Then what?

Here's an everyday question for Todsters that sums up my predicament as a fence-sitter; just a Yes/No answer will suffice... My 13yo daughter needs braces, cost (AU)$3000 out-of-pocket - checked around, compares to other quotes. Though any problem is barely noticeable, Doc says it will be "better in the long run" (of course, the "Long Run" is why I visit here!). So, go ahead with the non-critical op or risk the wife divorcing me? (Kidding, but there'd be friction!)

Thanks in advance, Matt B

I wore braces; lots of stigma associated with 'em. Didn't have much choice either. Did what I could to get 'em off as fast as I could--2 years+2 years retainer. Created later enamel and cavity trouble costing more than braces. My advice is to leave the choice to your daughter, provided the money's not an issue.

What other things might she need with the $3000 given the economy we're heading into? On the other hand, we're vain creatures and I'm glad my parents got me braces way back when.

It depends on how bad her teeth are, braces might not be "just vanity" but a medical necessity. She shouldn't have (for example) physical discomfort while eating, or be unable to clean her teeth properly so she loses them to gum disease, etc.

I'd go ahead and do it. The only reason not to is that you think the caca will hit the fan sometime soon. But if the caca hits the fan then we'd have hyperinflation and bank failures and you wouldn't have the three grand spare anyway! Use it or lose it :)

Thanks, not that I had any say to start with (never ask sisters, sister-in-laws, school mums - in fact any woman! - for their opinion on such matters). Guess we'll just have to be another three grand behind the eight ball if current trends continue.

Further, never ever seek a second opinion and let your wife find out about it!!!

Ahh, to be out of debt...

Regards, Matt B
Still crossing fingers and toes, coz there's two other kids with teeth in this family.

Actually it only says the existing model is dead. Change the model (say cost plus basis) and some form of charter airline is still possible. As the low cost airlines have shown, different models ARE possible - its just a question of who jumps when.

I saw we make the move back to zepplins!!

I think you meant "say" not "saw".

Zepplins can't stage a comeback. The problem is the gas used to fill them. Helium is very expensive and helium is a by-product of natural gas production. We're facing "peak helium" sooner or later. Here's a list of lighter-than-air gases which could be used to fill airships - you'll see that they are all either toxic, flammable, or rare.

Hydrogen (H2)
Helium (He)
Methane (CH4)
Ammonia (NH3)
Hydrogen fluoride (HF)
Neon (Ne)
Acetylene (C2H2)
Hydrogen cyanide (HCN)
Diborane (B2H6)
Ethylene (C2H4)
Carbon monoxide (CO)
Nitrogen (N2)

The cheap option for overland travel will become the train; and the cheap option for over-sea travel will be by ship again. Apparently you can run ships on wind power ;-)

The last I heard kerosene was flammable too, and toxic.
Some of the alleged 'show-stoppers' that are suggested against virtually everything beggar belief.
In addition I believe that nitrogen is neither toxic, flammable nor rare.

Helium shortage may not be much of a show stopper, but airships have some other problems which are hard to tackle. Two of the worst disasters with airships, the USS Shenandoah crash and the USS Akron crash, involved helium filled airships.
Airships are much less capable of dealing with difficult weather such as thunderstorms than aircraft. They can hardly fly 'above the weather' like jet airplanes can and controlling them near the ground in any wind conditions over 5 beaufort is very difficult. So they have to operate in conditions that minimize the chance of this happening. Airships may be able to replace cruise ships, especially now that weather forecasting is much better than in the 1920's and '30's, but their potential in long distance point-to point travel like on the North Atlantic is somewhat limited.

There are a lot of things against air ships, as you say.
Lack of buoyancy agents would not be the biggie though.

airlines are dead

no they aren't. people will always fly. the companies may not look like they do today, but we'll always fly.

People WILL always fly but they won't be the same people that are flying today...

At the current rate it's more likely 'the masses' will be more concerned with putting food on the table than cheap weekender flights to Vegas.

You have to put air flight into the context of a real squeeze on disposable income. Mass air travel has been the fortuitous confluence of cheap energy (enabling current air business model) driving a massive increase in disposable income (enabling usage of the business model). These trends are now turning.

Nick.

Always? Always?

John, If God had wanted humans to say 'always', she would have made us immortal.

Keep on believing, john15.

There'll always be a John15. Even centuries after he's bored all the other tod-ers to death.

--Ok, I'll waste a little time with a reply. Firstly for there "always" to be air travel there has to be a functioning kerosene-production system (or some John15s-may-fly new alternative discovered). I personally wouldn't bet on that being around in 30 years time.

More fundamentally there has also to be "always" some rich people willing to pay what it takes. But the present glut of rich people is itself a product of ultra-cheap oil and the resulting globalisation of markets etc. In the small local world of the future, xillionaires in MegaMansions are going to find (a) that their pre-existing xillions don't cut any mustard any more, and (b) that opportunities for gaining new xillions do not exist.

So there'll be no demand and also no-one rich enough to indulge in the insane speculative venture of satisfying that non-demand.

It always amazes me how people here can so accurately predict what will happen in 30 years time.
I would be very happy if I knew for certain what would happen in the 3.30 today.
They must have wonderful crystal balls.

An alternative scenario would see nuclear, solar and perhaps geothermal powering society successfully after a difficult transition, and some of that power being used to produce hydrogen to fuel aircraft, so that after a low point in 10-15 years air travel gradually resumes at some level.

Will this happen, or the scenario you present? I don't know - and neither do you.

Dave,

This is spooky. I could have said that.
Though I favor windmills producing ammonia and using some chemically modified version of that to make jetfuel....

Dave, you misrepresent my words there. I made no claim to "accurately predict". I merely said I wouldn't bet on it, in other words I reckon it's well below 50% chance there'll be planes in 30 years time.

As for the notion of there being functioning nuclear power "after a low point", I wouldn't bet on that either. Absent some miraculous turn of events, within a few years the entire human race is going to be struggling merely with the basics of food and shelter, and the prospect of a restart of industrial society is remote. Please take a history lesson from James Watt. Even with his ideas and vision and in an age of abundant fuel, he had a daunting struggle to see his vision actually manufactured because they did not then have the machines to make the machines. This is a most important principle in this field.

Fair enough - I thought you were being more absolute than was the case.
I see civilisation as a one-shot deal though, as high grade resources are too depleted to allow even civilisation at the level of the ancient world or the middle ages, which were dependant on exploiting these resources.
The people who I believe are entirely unrealistic (I am not arguing that you are one of them) are those who think we can get through to some kind of Woodstock society, with organic farming and windmills doing the job at anything like present populations.
If we screw up I would see a population at 4 million or so, call it one in a thousand for convenience, operating at stone age levels - after recovery, that is.

On the upside I find it difficult to see precisely why French or Chinese society should break down, even if breakdown occurs in many other areas.

I don't think it will be quite that bad. We do have a lot of metal that has already been refined, and charcoal will work perfectly fine for running basic forges. On the other hand, I'm not sure we could build back up from there. It may be impossible for us to get specialty materials like platinum to build more advanced devices.

Anything remotely like a large die off would lead to endemic warfare.
The resources like wood for charcoal would be pretty thoroughly trashed.
Rust would have won the race with mined metals before anyone was in a condition to utilise them.

On the topic of both warfare and jet fuel, the US Air Force is preparing for Coal-to-Liquids...
http://www.redorbit.com/news/business/1308384/air_force_eyes_coaltoliqui...

Took the words right out of my mouth Cretaceous.

The uber-rich and the military will be flying for quite a while still.

The rest of us... better take that European trip before the commercial airlines go belly-up.

Mash

--------

Father, Farmer, Doomer, Engineer, Drummer

I'd agree that people on this thread are underestimating how much people will pay to fly, especially across oceans. I think they'll be flying long after they give up driving or buy electric cars.

When I looked at the charts above my first thought was that the A380 will be a very successful plane!

airlines are dead

...people will always fly...

People may fly for a while, but it probably won't be via airlines. The defining feature of a "line" be it airline or tramline or shipline is scheduled service. I suspect that businesses will turn to charter flying over airlines in the not too distant future. Charters fly out of smaller, closer airports, use smaller, cheaper, more fuel efficient planes, and leave on the customer's schedule. As airlines become less and less convenient, charter convenience will improve by comparison. Many larger companies already own their own private jets; these aren't generally used to send the office staff to training seminars, but they will be. There are "fractional ownership" companies that allow companies to share private jets so you don't have to pay full price for something you only use 20 times a year. Charter companies are the next step down but they will be convenient and cost-effective longer than the airlines.
--
JimFive

Has nobody consider the possibility that cruiseliners may take the place of airlines at least for vacations?

For example: a cruiseliner could get from New York City Harbor down to Miami in at most a couple days.

The fuel savings per passenger should be significant compared to flying all of them down.

Also: cruiselines could probably be made nuclear much more safely than airplanes.