Friday, January 09th, 2009

Hot Topics : Hard Assets to Soar in 2009 | Bailouts to Boost Asian Markets | Treasury Bond Short Too Obvious? | Resource Scarcity Ahead

Silent Spring for Aviation

May 22nd, 2008 | By Byron King | Category: Oil Investment & Alternative Energy

Silent Spring For Aviation. My recent flight down to Texas offered some perspective on the future of aviation. And that future is bleak.

No, I will not regale you with a story of lost baggage or rude gate attendants. Actually, the flight was fine. I flew Pittsburgh to Charlotte, and then Charlotte to Houston. From my perspective, there were no travel problems. Really, even the Transportation Security Agency people in Pittsburgh showed some courtesy. That part of flying was fine.

But I’m sure glad that I am not paying for the gas for these jets out of my own petty cash. Wow! Fuel costs are killing the airlines. Almost every flight in the skies these days loses money. It does not matter how few peanuts they put in the little bags. At the very least, 20% of airline seats are going to go away within the next six months. Really, some airlines cannot ground their inefficient planes fast enough.

In the future, legacy carriers that fly packed aircraft between distant hub cities might eke out a small profit on each flight. That’s with much higher ticket prices. But the shorter hops are money losers. So the current situation cannot last. At this rate, small towns are surely going to lose air service.

It means that 70% of the nation’s airports are at risk of losing most or all of their airline service. And you have probably noticed that the U.S. passenger rail system is mostly gone, except for a few corridors.

About 45 years ago, Rachel Carson wrote a book called Silent Spring. The book sounded an alarm about the impact of man-made chemicals on the natural environment. Carson’s “silent spring” referred to the widespread destruction of bird life due to toxic poisoning and destruction of habitat.

It is time for turnabout. Mother Nature is taking her revenge in the form of high-priced oil. The cost of jet fuel is soaring. The airplanes of the world are starting to get grounded. The skies of the future will not be so crowded. Flying will cease to be an option for many tens of millions of Americans — maybe for hundreds of millions.

In the future, only the most efficient jets (like Boeing’s new 787 Dreamliner) will ever go wheels up at the end of a runway. Ticket prices will be high. How soon will these things happen? I think that we will experience our first silent spring as early as next year.

Will Policy Makers Get Energy Smart?

The next U.S. president had better get really smart on energy, and I don’t mean dusting off some loser playbook filled with failed energy policies from the 1970s (or the 1980s or 1990s or 2000s, truth be told).

I have read what passes for energy policy on the Web sites of all of the presidential candidates. None of them really gets it. None of them. It’s mostly pandering and rambling.

“Energy” is just another issue about which the candidates say as little as possible, in as plain vanilla a way as possible, while trying to sound profound. There is no original thinking. There is no courage to tell the American people what they need to hear, as if people don’t already know a lot of it. There is not even any acknowledgement of honest reality.

The U.S. needs to get its energy act together. If we screw up energy, most other things will follow the downward spiral. Call it silent spring on steroids.

Until we meet again…

Byron King

Note: Byron King is a frequent contributor to the free e-letter Whiskey & Gunpowder. To receive daily insights into energy, oil, commodities and other natural resources sign up here!

Source: Silent Spring for Aviation


AdvertisementWe believe in sharing our global knowledge. So you can make informed decisions.

As a company, EverBank® is committed to your global portfolio success. That's why we match our innovative product line with the insightful research tools you need to make informed foreign currency decisions.

Take advantage of our expertise with free resources like Chuck Butler's Daily Pfennig, the new Foreign Currency and Global Market Resource Pages of EverBank.com and a Trade Desk that's staffed with currency experts who are eager to help you.



More on this topic (What's this?) Read more on Airlines at Wikinvest
Tags: , , , , , , , , ,

By Byron King

Related Articles



About the Author

Byron KingByron is now a contributing editor to Energy and Oil, Whiskey & Gunpowder and editor of Outstanding Investments. After Harvard, Byron has followed developments in the oil and gas industry for more than three decades.

See All Posts by This Author

Energy and Oil

With a diligent mix of energy and market research, Energy and Oil delivers a unique investing perspective in an up-to-the-minute format. Our contributors are some of the world’s foremost energy experts — heralding years of experience in the field of oil, energy, politics, and emerging technologies.

See All Posts from This Publication