I've already cut back my three-day weekend trips to Florida (from SFO). I can only imagine how the travel downturn is going to harm leisure markets like Florida, which is already reeling from the mortgage meltdown.

I'm not trying to launch a personal attack, but I think your post seems to be pretty ridiculous. You start off by coming to the CO forum and commenting about CO's prices rising, and then claim not to blame them?!?!? Yes, we know they are not the root cause of oil prices, but I think a post here of the nature that yours has would indicate that you think something could be done by CO about it.
Secondly, your suggestions for a resolution seem pretty crazy themselves. Now that the dollar is in a nose-dive for various reasons, I don't think anything will change to be very positive for a while. It would take a pretty dramatic and instant change of policy to shift the economic momentum in the next year.
Lastly, and slightly tied to the second point....Not flying for a day? Are you kidding? First, think of the business lost. Secondly, think of how much that would piss off the people who actually need to travel then? Who would announce it first (look at the negative press on the baggage fees and what AA has seen for being the first to announce the first bag fee)? Lastly, CO and other airlines still have a lot of fixed costs for the business. They can't just not pay employees, landing slots, or a/c leases for the day they choose not to fly. Strikes occur because union support is strong among a group and they have a major swaying power. I think the US airline industry is too competitive and a few airlines would break the boycott to reap the benefits that other airlines are giving up for the day. Secondly, I don't know the US airline significance in the global fuel market, but I'd bet that it will be a minor dent. Sure, it costs a lot, but I bet it is just a drop in the bucket.
Now, maybe we can all have a major significance with vehicle usage....so lets all boycott EXXON next tuesday before noon, and then CITGO after lunch. That will show them!:D

As usual, a simple post blown way out of proportion.:rolleyes:

I agree that the fares have gone up and it is affecting a lot of people. My normal monthly route is up 50 percent and seems to be rising. I don't know if it's going to get worse but my husband's colleagues seem to think so. (They're in energy trading.)

I've already cancelled our summer vacation as the airfare went through the roof, and doubt that we'll do anything far from home with gas prices so high. I'm just glad that we took a trip earlier this year- Springtime in the UK was a great treat.

I just wonder if this will affect my Elite Status. I just made Gold for next year but maybe I'll miss Plat- I won't know until the end of the year. I know I won't make it by Fall like I did last year. Nothing to do but ride it out!

It costs CO in fuel only to move you and your cruise bags from US to Europe and back about $700 each way, with the prices rising it leaves CO with almost no profit to cover other expenses. So, are you asking CO to pay for your vacation cruise? Maybe you want some champaign and caviar with that too?

It's not just CO. I'm surprised that people, like the OP, express surprise. This is only the beginning. For years there's been wilful denial on the part of many factions about the actual condition of oil reserves:

http://www.guardian.co.uk/science/20...andpetrol.news

Look at this quote, from early 2005:

"Governments are always excessively optimistic. The problem is that the peak, which I think is 2008, is tomorrow in planning terms."

We're here now.

The decision you describe, about not wanting to pay the new market rate for FCO, is being multiplied hundreds of thousands of times worldwide every day.

Let's face the facts. We've had a great run, we've gone many places and seen amazing things. But the game is over. We're all staying at home a lot more and, if we're wise, actively looking at investing in alternative energy.

I agree with other posters, ironically Elite status is going to be worth much more in the future because so few will possess it. I think we'll see mass decay in Elite status across the board starting now...no leisure Plats on the majors soon...

But, I think air travel will become more comfortable again... I can see all TATL service will be operated by all-business class 73Gs. One flight a day EWR-AMS/LHR and that's it. At the fares we're talking about - which are not as cheap as $1800 to FCO - there will be no reason for the ConUniHound airline to even contemplate Y cabin configs.

But most of us here won't be flying on them anyway. Buy your model a/c from the CO store now, because you'll want to remember your great rides...

One more thing. Redeem now. Giant hikes in redemption rates are around the corner, possibly as soon as the end of summer/early fall. We're not talking 50k for TATL Y. I can see it doubling, immediately. Take the BIG ONE, within the next 12 months. Book now, and do so with carriers that have more chance of avoding Ch.7.

Wow, what a panic post. The sky is dark, but it's not falling like that. Doubling award redemption? How does that drive extra revenue? It doesn't. It does drive away even more customers.

All J class flights? Already tried and failed. One TATL all J narrow body a day? Come on, there are still millions of people flying every day - even if fares increase, there isn't going to be a collapse like this.

Not really. CO's TOTAL CASM averaged a bit under 12 cents for Q1 '08. That would be a TOTAL cost of $600 to move one person from EWR to ATH. Fuel is a significant chunk of that, but likely only about $200 of the total cost. Fuel prices have risen 60 cents/gallon - ~22% since Q1, so the numbers are a bit higher, bu nowhere neat $700 each way. And that's not even taking into account the efficiencies of longer flights versus shorter ones and other fun variables.

WOW, CASM used to be something like 10cents a year or so ago, and that is what I used to slap on figures to see how profitable I was for a flight. Since labor, landing rights, and leases tend to be pretty fixed costs, I'd bet a good chunk of that 2 cents CASM difference is fuel, and for flights next summer, the fuel may have an influence upward of 5 cents or more CASM if things get as bad as some suspect...

I think the huffy tone of the OP is pretty amusing. For months, people have complained about being nickeled and dimed on things like checked baggage fees and wishing the airlines would just raise fares. Now, fares are escalating and that's no good.
Unless the minority view proves correct, that oil in the middle of the mother of all bubbles, these fares will be a fact of life for a long time to come. AT least middle seats should open up again.
Otherwise, CO management is doing what they must to survive.

bocastephen, panic to you, perhaps...rational analysis to me. You may have a different opinion. I believe $200/barrel isn't far away. There isn't going to be a significant drop in oil price...ever. The reverse. Demand has risen rapidly and many sources now agree that there simply isn't more easily extractable oil. Let the free market do its work, using the price signaling mechanism. It's beginning to do that. Switching and adaptation are beginning on a much larger scale: just look at all the unsaleable SUV's on dealer lots outside your door. They're outside mine here. But unlike other sectors e.g. power generation, there's simply no fuel substitution possible right now for commercial aviation.

Yes, there are millions of people flying at the moment...but feel the currents. When TATL flying costs $2000 per ticket, compared with say, $700, the impact on traffic will be highly nonlinear. People will choose to spend discretionary income on other things. I don't believe that the current 10 or 12% systemwide reductions in capacity will solve the problem - many airline CEOs except Michael O'Leary have gone on record to note that their business models don't work at $120/barrel. Even O'Leary thinks $130/barrel is the limit to FR's capacity - and they have the most robust business model in passenger aviation with respect to raw oil costs.

We're already 14% past that. There's hysteresis in the aviation system because of enormous fixed costs and contract inertia such as fuel hedging, but this fall we'll have a clearer idea of the impact going forward.

As for award levels, doubling award redemption levels doesn't increase revenue - but, it decreases liability. Each TATL ticket can be notionally valued using airline CASM figures or some other metric. The opportunity cost of a redeemed TATL seat is soon going to be $2000 - assuming high load factors and analogous pricing above. That will encourage a re-valuation.

10-12% capacity reductions are a rosy prognosis. At $175/barrel, for example, without further, much more drastic action, how long would it take for most airlines to collapse? At $200? I know, you may think those numbers are far-fetched. I don't, hence my views. But, I'm not a left-field Lovelock in this view. Here's a Goldman Sachs energy analyst, a guy who appears to have a good track record on this issue:

http://news.bbc.co.uk/2/hi/business/7387203.stm

This spike is not temporary. The New Age is coming :eek:

But we can still travel, because the all-in-one transportation solution will be provided by EDF AirFrance ConUniHound. Smaller TATL flights connecting to high-speed rail hubs all over the world.

I agree with RedTail..There is going to be Alot less Elite`s next year so Elite status will have much more value in the future..Maybe one of the upsides of all this is it will make "Elite" status Elite once again..:)

From CO's slide presentation to Wall Street, like this one, page 19:

http://www.continental.com/web/en-US...2008_03_18.pdf

a 764 consumes 15.2 gallon of fuel per passenger per 1,000 miles. EWR-ATH is almost exactly 5,000 miles, so that's 76 gallon of fuel. According to the most recent traffic report (May, 2008), CO paid $3.43/g. 76 x $3.43 = $260.

That's the panic part. Almost all the real experts (including leaders of some of the large oil companies) call 60-70/b as the proper price range for oil given today's demand/supply equilibrium. It's also accepted that today's pricing is a function of skewed speculation, which in itself could be accompanied by illegal activities such as collusion, price fixing and other mischief. The government is looking into that as we speak, and the investigation will hopefully amplified by the impact of that moron analyst who helped drive oil up on Friday, assuming he survives long enough to give any testimony.

On the supply side, it's been pointed out by others that new oil finds are coming into fruition at a fairly good clip, new technology will render our vast coal reserves usable, and new technology will make oil sands extraction both efficient and environmentally friendly. Currently, demand is dropping as the economic slowdown takes root.

On the aircraft front, Richard Branson and Virgin have already begun experimenting with biodiesel as a jet fuel - although personally I see the endgame of that experiment creating a blended product, rather than flights tooling around on 100% biodiesel.

So - yes, things are very bad right now, but there is no new era of doom to welcome, nor are routine 2,000 fares across the Atlantic around the corner.

I still call oil at 100/b in 90 days or less, 80/b in 12-18 months and 60-70/b in about 24-36 months. If we can get past our refining bottleneck and actual crack the extra oil we're finding, prices could head even lower.

I experienced the price jump. $1197 to $1547 on YYZ-BOM at Christmas time. The jump came the day after the CO cutbacks announcement.

I am partially responsible for a low budget university cultural exchange program. Air travel is a big part of the expense. I and anyone in a similar situation can't look at the world through rose coloured glasses. The NA airlines are making significant cutbacks. This will drive fares up REGARDLESS of the price of jetfuel. These cutbacks don't even take into account any future increases or in my mind, even the current price. We need contingency plans that oil is $150/b a year from now and the price of jet fuel fully reflects that.

That doesn't change the truth of what you've written. The problem is that a function of any market is irrational exuberance can be present for an irrationally long time. Airlines aren't planning on $60/barrel oil, neither should their customers.

The airline industry as we know it is not sustainable at $150+ oil.

The only shimmer of hope I can see is that the sharp rise in oil price in recent months has far, far outpaced the significant rises in demand and/or decreases in supply. Thus, it seems highly speculative in the long run. But when such speculation ends and reality returns is anyone's guess and if it goes on for a prolonged amount of time the entire airline industry could collapse and government intervention could be necessary to keep air transport which is vital to our economy. If you really think about the economics involved this is easily the greatest threat the industry has ever faced.