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	<title>Contrarian Stock Market Investing News - Featuring Bargain Stocks &#187; Flights</title>
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		<title>&#8216;Silent Spring&#8217; Already Setting In</title>
		<link>http://www.contrarianprofits.com/articles/silent-spring-already-setting-in/2822</link>
		<comments>http://www.contrarianprofits.com/articles/silent-spring-already-setting-in/2822#comments</comments>
		<pubDate>Wed, 04 Jun 2008 18:40:05 +0000</pubDate>
		<dc:creator>Dave Gonigam</dc:creator>
				<category><![CDATA[Politics & Economics]]></category>
		<category><![CDATA[]]></category>
		<category><![CDATA[Air Transport Association]]></category>
		<category><![CDATA[economics]]></category>
		<category><![CDATA[Flights]]></category>
		<category><![CDATA[Foreclosure Rates]]></category>
		<category><![CDATA[Fuel Prices]]></category>
		<category><![CDATA[Home Foreclosure]]></category>
		<category><![CDATA[oil]]></category>
		<category><![CDATA[United Airlines]]></category>

		<guid isPermaLink="false">http://www.contrarianprofits.com/articles/silent-spring-already-setting-in/2822</guid>
		<description><![CDATA[<p>I have to admit when Byron King made his <a href="http://www.energyandoil.com/silent-spring-for-aviation" target="_blank" onclick="javascript:urchinTracker ('/outbound/article/www.energyandoil.com');">&#8220;silent spring&#8221;</a> prediction last month — a severe curtailment in air travel as early as next spring because of fuel prices, including an estimate that 70% of U.S. airports are at risk of losing commercial passenger service — I was a bit skeptical.</p>
<p>This morning, it appears the process is well underway.</p>
<p>Of course there&#8217;s the news that United Airlines <a href="http://biz.yahoo.com/ap/080604/united_fuel.html?.v=2" target="_blank" onclick="javascript:urchinTracker ('/outbound/article/biz.yahoo.com');">planning to retire</a> 20% of its mainline fleet by the end of next year (up from its original plan of 7%), and slashing routes accordingly.  The details are still to be worked out but already it&#8217;s been decided that Los Angeles to Hong Kong is history.</p>
<p>But on top of that, USA Today has <a href="http://www.usatoday.com/travel/flights/2008-06-03-airlines-cuts-flights-fares_N.htm" target="_blank" onclick="javascript:urchinTracker ('/outbound/article/www.usatoday.com');">pored over</a>  all&#8230;</p>]]></description>
			<content:encoded><![CDATA[<p>I have to admit when Byron King made his <a href="http://www.energyandoil.com/silent-spring-for-aviation" target="_blank" onclick="javascript:urchinTracker ('/outbound/article/www.energyandoil.com');">&#8220;silent spring&#8221;</a> prediction last month — a severe curtailment in air travel as early as next spring because of fuel prices, including an estimate that 70% of U.S. airports are at risk of losing commercial passenger service — I was a bit skeptical.<span id="more-2822"></span></p>
<p>This morning, it appears the process is well underway.</p>
<p>Of course there&#8217;s the news that United Airlines <a href="http://biz.yahoo.com/ap/080604/united_fuel.html?.v=2" target="_blank" onclick="javascript:urchinTracker ('/outbound/article/biz.yahoo.com');">planning to retire</a> 20% of its mainline fleet by the end of next year (up from its original plan of 7%), and slashing routes accordingly.  The details are still to be worked out but already it&#8217;s been decided that Los Angeles to Hong Kong is history.</p>
<p>But on top of that, USA Today has <a href="http://www.usatoday.com/travel/flights/2008-06-03-airlines-cuts-flights-fares_N.htm" target="_blank" onclick="javascript:urchinTracker ('/outbound/article/www.usatoday.com');">pored over</a>  all the major carriers&#8217; schedules for this coming October, compared them to last October, and found the following:</p>
<ul>
<li>Significantly fewer flights to the major vacation/convention destinations — Orlando, Vegas, Honolulu.  The tickets have been too cheap for too long to even begin to cover costs</li>
<li>Fewer flights to big-city airports like Oakland and Chicago-Midway that exist in the shadow of hubs like SFO and O&#8217;Hare (and were huge growth stories just a few years ago)</li>
<li>At least 50 smaller airports will see service levels drop by at least one-third</li>
<li>15 of the smallest airports are losing service completely with the shutdown of Air Midwest</li>
</ul>
<p>The regional jets seating 50 or so passengers are especially cost-inefficient now.  That means no more direct flights from Washington-Reagan to Columbus, Ohio; Boston to Norfolk, Virginia; or Cleveland to Chicago-Midway.</p>
<p>Kansas City, where 16 routes were added just last year, will see a 16% year-over-year reduction in service by this fall.</p>
<p>All told, the Air Transport Association says 60 communities that had air service last year have lost it this year, with another 37 to come by year&#8217;s end.</p>
<p>Curiously, a couple of the cities mentioned in the article happen to have some of the highest home foreclosure rates in the country.  Stockton, California will lose a third of its service by this fall.  Merced, California has lost all commercial service already.  Coincidence?</p>
<p>And this is with oil in the $125-135 range.  What happens at $150 or $200 (which even perma-Pollyanna Daniel Yergin <a href="http://www.newsweek.com/id/139395" target="_blank" onclick="javascript:urchinTracker ('/outbound/article/www.newsweek.com');">allows</a>  as a possibility now)?  Silent spring, that&#8217;s what.</p>
<p><strong>Update:</strong>  After bringing the <em>USA Today</em> article to Byron&#8217;s attention, he replies:</p>
<p><font face="Arial">With six more months of high oil prices, you will  not recognize the airline system — not just in the US but across the  world.</font></p>
<p><font face="Arial">This will play havoc with the world&#8217;s tourism  industry, the largest direct or indirect employer of people on the  planet.</font></p>
<p><font face="Arial">Hawaii flights down 25%?  No driving to Hawaii,  eh?</font></p>
<p><font face="Arial">And pity poor Disneyworld and Universal Studios at  Orlando…  Sorry guys.  If I have to walk to get there, I ain&#8217;t  coming.</font></p>
<p><font face="Arial">And what happens to &#8220;ecotourism?&#8221;  This is the ultimate in not disturbing the environment…. You&#8217;ve got the &#8220;eco,&#8221; but no tourists.  So the locals will have to revert to cutting down the rain forest and eating the exotic animals to survive, right?</font></p>
<p><font face="Arial">I especially like this line from the USA Today  article….</font></p>
<p class="inside-copy"><font>Kansas City air service manager Justin Meyer says Kansas City is emblematic of changes playing out around the country. He thinks what&#8217;s happening at his airport will not be the exception.</font></p>
<p class="inside-copy"><font>&#8220;We might be on the leading edge,&#8221; he says.</font></p>
<p class="inside-copy"><font face="Arial">Yep, the leading edge of what????</font></p>
<p class="inside-copy"><font face="Arial">If the 2-hr flight from Boston to Norfolk is now  going to become an 8-hour ordeal, with a transfer through JFK or whatever…. </font></p>
<p class="inside-copy"><font face="Arial">Well, we have a problem.</font></p>
<p class="inside-copy"><font face="Arial">Should you drive instead?  Turn it into a long day  of driving, each way…. if you can buy gas along the Interstate.</font></p>
<p class="inside-copy"><font face="Arial">So a one-day business trip becomes a three-day  trip, in the best of circumstances.</font></p>
<p class="inside-copy"><font face="Arial">Or, if you don&#8217;t want to drive, where is the  passenger rail system to take up the slack?  Whoops.  No choo-choo.</font></p>
<p class="inside-copy"><font face="Arial">Wow, the opportunities for disaster are legion in  all of this.</font></p>
<p class="inside-copy">As are the opportunities in companies with proprietary technology that won&#8217;t rescue us from Peak Oil, but <em>can</em> make the transition to whatever&#8217;s coming next a little easier.  Byron has his eye on a company that could one day put oil refineries<a href="http://www.isecureonline.com/Reports/ESI/Refine/" target="_blank" onclick="javascript:urchinTracker ('/outbound/article/www.isecureonline.com');"> out of business.</a></p>
<blockquote></blockquote>
<p>Source: <a href="http://www.dailyreckoning.us/blog/?p=821">&#8216;Silent Spring&#8217; Already Setting In</a></p>
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