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Even though we’ve been hearing our fair share of bad news regarding all flavors of downsizing going on in the airline business, the Global Fortune 500 List comes back, in 2008, to remind us that some airlines out there are still doing very well for themselves.

To put it simply, some people just need to fly.

For business or leisure, lots of sky travelers simply can’t do without their airplane link to another location on our Blue Planet. The airlines that are performing the best are those which properly cater to these people — and they’re not necessarily selling the cheapest seats either, it’s actually quite the contrary.

While the budget challenged airplane travelers need to cut back on their travel expenses, the richer crowd doesn’t really bother with the extra charges related to homeland security, fuel or various other fees being piggy-backed on the ticket prices.

Planes consuming less fuel, flying with less (empty) seats and serving busier routes will help the airlines who dare to reinvent themselves to thrive, even with the bargain-hunting passenger crowd.

So who’s on top, in the 2008 list of the Global Fortune 500?

Let’s take a look at the numbers:

The profits aren’t anywhere near those from banks or pharmaceuticals but this is airline transport, an industry where the competition is fierce in the air but also from alternative transportation like high-speed trains, direct bus routes, marine shuttles, people’s cars and others.

In this particular context, turning a profit -at all- is a good sign.

Because of anticipated market pressures on the airlines, in the US and abroad, the next few months and years could prove to be bumpy for the investors who need to keep in mind that with technological breakthroughs and advances, planes will likely get more affordable to operate and as such, profits could be looking up. Also, the current price of fuel, which is at an all-time high, is expected to go down enough for the airliners to breath, at least for a short while.

Let’s see how these and other smaller airlines perform in these challenging times, in the months and years to come. Expect major and not-so-major mergers and acquisitions to reshape, yet again, this industry.

Tags: airlines, airliners, airplanes, planes, sky travelers, tourists, business travel, air travel, airplane tickets, bargain prices, bargain hunters, lower prices, high fuel prices, fuel prices, airplane fuel, passengers, us, world, global, fortune, money, revenues, profits

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The entire supply chain is under great financial stress as the spot price of WTI crude oil rose steadily to over US$110 per barrel, on March 13th of 2008 — a record-setting price.

While the price for WTI crude oil is expected to average near $100 per barrel through the rest of this year, transport companies and everybody else getting their supply through their services are bracing for the effects of higher fuel prices during the summer season, defined as the period from April 1st to September 30th.

Pricewise, let’s start with the regular grade gasoline retail prices, which averaged $2.93 per gallon last summer (of 2007) and are projected to average $3.54 per gallon during the current driving season.

The trucking business is going to be hit even harder as diesel fuel prices, which averaged $2.85 per gallon last summer, are projected to average $3.73 this summer.

In fact, the monthly average gasoline price at the pump is projected to peak at just over $3.60 per gallon in June while the monthly average diesel price is expected to peak at just over $3.90 per gallon in April.

These rather scary retail price projections reflect higher prices for the refiners’ average acquisition cost of crude oil, projected to average close to $97 per barrel, up from about $67 per barrel last summer which account for a hefty $30 price hike, per barrel. Furthermore, strong world distillate demand growth, especially in Europe and Asia, will do nothing to help the situation domestically, in America.

It is important to note, however, that even if the US national average monthly gasoline price comes to peak around $3.60 per gallon this summer, it’s entirely possible that prices, at some point, will cross the $4 per gallon threshold, severely hurting the transport industry and those who depend on it.

Countless consumers may be forced to reconsider driving their cars at all and the same kind of dilemma may happen for transport operators of all sizes as well as petroleum-based product manufacturers.

Transportation and logistics companies, especially in America, need to plan (and provision lots of “emergency money”) right now for this summer’s potential fuel price explosion.

Tags: gas, fuel, wti crude oil, oil, diesel, petroleum, pump, america, usa, transport, logistics, summer

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Back in the 1960’s, taking the plane was a “special event” where the passengers were treated like kings, from the moment they entered the departure airport to the moment they left the arrival one.

For instance, the meals that Air France served to it’s Montreal-Paris liaison passengers were prepared by the very prestigious Ritz-Carlton, on Sherbrooke Street, in Montreal. If you’ve flown this Air France lately, you know it’s not as glitzy anymore, even if you fly in the more expensive business class.

So things have changed in the airlines business and not everyone agrees it’s for the better.

Companies like Air Canada, after being sold to American interests, lost interest in the less traveled routes, such as Atlantic Canada, Quebec and Northern Canada, thus severely penalizing smaller communities which had, under Canadian management, been decently served — globalization, privatization and shareholder greed have apparently trumped over all basic consumer satisfaction obligations.

Air travel horror stories abound.

From the fact that it’s still complicated to deal with the airlines, to buy tickets or worse, to get customer service, to the continuous stream of mismanagement imbroglios (think about the luggage nightmares), many modern day airlines have dumbed down their service to the point where it’s not even close to what their marketing promises.

For air passengers, the bread and butter of the airlines, the multiplication of fees (for everything, really), the grossly exagerated security paranoia, the flight delays (with little or no compensation to the ticket holder), the arrogant attitude from the airline personnel and the plastic-like food served on flights (when anything is served, at all) taking the plane has become a pain more than a “generally pleasant experience”.

Regular air travelers are now even attempting to opt-out of today’s air travel madness by asking their companies to buy sophisticated “always-on” teleconferencing solutions to minimize the air commuting back and forth from the various company locations — in itself, this is a good thing but still, it’s precipitated by the fact that taking the plane, for many people, is not exactly a walk in the park, at least not anymore (because it used to be much easier, more expensive but easier nonetheless).

Some airlines specialize in high-yield market niches like the C-level business travel and that’s fine but their ads feature “great service” as a plus… shouldn’t that be a bare minimum for even the “regular” flights?

While the airline industry isn’t too bothered with customer satisfaction, a study published earlier this week by American universities reveal that over 25% of the flights were late, in 2007. Accordingly, the number of traveler complaints filed was up by a whopping 60% last year, making it the worst year for air traffic, in America, ever!

Even more preoccupying is the fact that experts in airline customer satisfaction predict the current situation will continue to worsen as the price of tickets, the fees and the barriers to free movement of travelers continue to mount while, at the very same time, the service level continues to drop.

This being said, let’s keep in mind that the current state of affairs could translate into a unique opportunity for venturing airline entrepreneurs with an astute sense for customer satisfaction.

Tags: airlines, air travel, planes, customer satisfaction, passengers, great service, tickets, fees, security

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A revised international investment proposal released today by the U.S. Department of Transportation would strengthen requirements initially proposed last November concerning U.S. citizens’ control of all safety, security and national defense obligations of domestic airlines while allowing international investors to make decisions on commercial matters involving U.S. airline management.

The supplemental notice of proposed rulemaking issued by the Department reflects comments provided on the November, 2005 proposal from consumers, airlines, aviation personnel and other interested groups. That proposal would make it easier for U.S. airlines to raise money, restructure their businesses and form strategic partnerships and alliances by allowing international investors more say in some aspects of airline operations such as scheduling and marketing.

The supplemental proposal issued today would make clear that U.S. citizens who are members of a domestic airline’s board or the voting shareholders, must retain the authority to revoke decision-making authority that international investors may acquire. For example, domestic board members might decide to revoke international investors’ decision-making authority over scheduling and fleet composition if they felt that those decisions were not in their airlines’ best interests. The new provision would make clear that U.S. citizens remain in “actual control” of the airline, as required by statute.

In addition, the revised proposal would strengthen the original proposal’s requirement that U.S. citizens have full control over all policies and implementation relating to safety, security and national defense airlift commitments. The new proposal would specifically prevent international investors from having the ability to hire, fire or control the budgets of senior airline managers with direct responsibility for safety, security and national defense airlift commitments.

As with the original version, the revised proposal would only apply to international investors from countries that have Open-Skies aviation agreements with the United States and allow similar investments by American citizens in their domestic airlines.

Here’s a partial list of US domestic airliners targeted, directly or not, by this proposal:

• Alaska Air
• Aloha Air
• America West Airlines
• American Airlines
• Continental Airlines
• Delta Air Lines
• Hawaiian Airlines
• Northwest Airlines
• Pacific Coastal Airlines
• Southwest Airlines
• United Airlines
• US Airways
• WestJet Airlines
• World Airways

The Department is seeking additional comment for another sixty days to allow for all interested groups to comment on the revised proposal.

Tags: airlines, investments, us, dot, proposal, safety, security, national defense, citizens

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This may sound overly optimistic to many aerospace experts but nevertheless U.S. Secretary of Transportation Norman Y. Mineta says space crafts could be cleared to fly passengers by 2008.

Commercial space crafts could be cleared to carry passengers by 2008, Secretary of Transportation Norman Y. Mineta announced today. Speaking to a group of space entrepreneurs, the Secretary said that a number of companies should be set to take passengers into space and that the U.S. Department of Transportation would be ready to clear these flights within two years.

“This timeline isn’t based on science fiction,” Secretary Mineta said. “It is a timeline based on the reality of where commercial space is today and where we expect the state of commercial space to be within two short years.”

Mineta noted that the Department, which is responsible for clearing commercial space travel, would be ready to approve the passenger flights once tests of craft designed to take passengers into space were completed. The Secretary said he expected to issue permits next year to allow the test flights, and that if these flights were successful, the Department would then issue a license for passenger space travel.

“We will move quickly to green-light flights that we know are safe,” Mineta said. He added that if companies were able to complete testing sooner, the Department also would be ready. “When the industry is set for lift off, we will be ready to launch,” Mineta pledged.

The Secretary made it clear that the Department would take steps to ensure the safety of these commercial passenger space flights. But he added that the agency would make sure these checks did not delay the launch of passenger space travel.

“We have an important role to play in ensuring the safety of commercial space flights, especially for passengers,” Mineta said. “But we also have an obligation to encourage innovation and support new developments.”

The Secretary made the announcement during a keynote address to the 9th Annual Commercial Space Transportation Conference in Washington, DC.

More companies are gearing up for the anticipated space travel boom, in the US and around the world.

Millions of people would pay to see the Earth from space with their own eyes, not to mention the spectacular ride out of our atmosphere and then back into it.

Tags: earth, atmosphere, space travel, commercial space transportation, travel boom, us, world, space crafts

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