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81 comments on A Tale of Profit and Loss - The Future of Air Travel – Part 2
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81 comments on A Tale of Profit and Loss - The Future of Air Travel – Part 2
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Hi Anti_Elvis,
You are not including all the costs of driving;1) uses more fuel for one person than flying 2) accommodation costs 3) loss of wages for 2 days or 2 days less vacation time. I would agree that for retired people time and even accommodation may not matter(sometimes the best part of the trip is the travel).
Yes, if there is a complete economic collapse the airlines will go down with everything else, thats self evident. The question is surely will people fly even if they spend twice or even ten times the real cost of airfares?. We know form 40 years ago, they will, at least to travel overseas. As a student my first trip overseas in 1972 cost 6 months salary for the airfare. Today it would be 1 months of a graduate students salary. Similarly, if we still have business people, they will travel by air rather than drive 1 or 2 days.
In the USA people are already shifting to driving instead of flying. Yesterday my cousin and his wife from North Carolina stopped by St. Louis, Missouri while driving to Wyoming. They decided on short notice to visit some reletives there and considered air fare (about $2000) versus two and a half days each way in the car. In comparing the gas cost to flying over half the $$$ is saved by taking their 28mpg car (3800 miles total / 28mpg) x $4 per gallon = $543. My cousin has a good paying job and lots of vacation time, so the time factor was not so important. Many middle and lower income people simply will not make the trip instead of taking the time off work to drive or pay the much higher air fare.
The bottom line is that flying in ten years will be done largely by the wealthy people and business travelers, just like 45 years ago. Others will take a train or bus or, if gas is not rationed, take the car. Many trips will be foregone. I forecast air travel to fall by 30% or more in the next ten years.
On the topic of using trains, I did read recently in the NY Times that Amtrak was booked right up. I was most shocked that Amtrak only has around 700 rail cars for the entire nation. Is Amtrak a private company or is it controlled by the US government? I'm Canadian, we have Via Rail, which was national for years, but that ended in the 80's. I don't think things are much better up here.
IINM, Amtrak is a private company, but recieves annual funding from various levels of Government. The lower down the totem pole you go, the more generous elected officials are willing to be towards Amtrak.
Amtrak itself came about as a result of pretty much every railroad in the US withdrawing their passenger trains. Moving people was never profitable (or perhaps marginally so), even in the heyday of the passenger fleet. Rather, it was the extra revenue generated by the mail that allowed the vast numbers of passenger trains to flourish. As air and road took larger and larger pieces of the Mail traffic away, the trains became unprofitable.
In it's own way, Peak Oil will force mail back to the rails (as trucking and air companies go bust), and help with a rebirth of long-distance rail passenger travel. :)