Soaring jet fuel prices pushing down airline profits by >$10 billion

27 Comments

1. I hope this will trigger an interest in high speed passenger trains like in Europe for small distances. The east coast is a perfect example of where such a technology could work.

   A while ago, this board was active on the topic but no one mention that high speed trains take you from downtown to downtown, a precious and incredible competitive advantage over air travel.

   This advantage was not addressed.

   1. @Daniel – trains take you from downtown to downtown, but the overall speed is hardly “high”. I like trains, but they do have to stop rather frequently to load and unload passengers at intermediate stops.

      If you design non-stops, you bypass a whole lot of customers or force them to drive to the hubs.

      1. Rod,

         High speed trains can go 200mph easy (320kmh). In 2011, this speed is customary between Paris and Lyon.

         Now, with the downtown to downtown value chain in effect, this becomes a strong substitute to air travel for all commercial passenger flights that last one to two hours. That’s a lot of flights on the US sea coast !

         Think of all the jet fuel being displaced to nuclear.

         1. The biggest issue with high-speed trains in North America is the politics of stops. 200MPH is all well and good but if you have to stop at every village and town the average speed drops like a rock. Don’t stop and you have every politician pushing to have his/her station added to the route.

         2. What you describe is what happened with the Shinkansen in Japan. However not every train stops at every station, and even so it’s very competitive with airplanes between Tokyo and Osaka.

            The newest TGV line is killing airplanes between Paris and Strasbourg. It has killed buses between Paris and Cologne some years ago, Paris-Brussels airplanes are dead too. Also Paris – London makes almost no sense when you see how much more convenient the North Station in Paris, and St Pancras in London are.

         3. Europe never did lose the passenger train network the way North America did. The public is far more supportive of TGV and such there. Trying to build a market here and fight vested interests over stops is a battle that has been fought on several occasions on a number of corridors and it is very messy. It is hard to tell people that their taxes are subsidizing a train that that they will never take.

         4. @ jmdesp

            That’s what I aim at. Kill the short airplanes routes. Boston @ NYC – 1 hour.

            Bring it on. One day, it’s gonna happen. There has been talks of Montréal – NYC for years. 336 miles…. Less than 2 hours …

      2. Perhaps the main obstacle to high-speed rail (indeed, to passenger rail in general) in the United States is the extreme suburbanization of the country. Train travel isn’t very convenient if you need a car when you get the other end…

         1. @George Carty – you’re right, of course. The thing is that I LIKE suburban living. Based on 50 years of suburban living in Florida, Maryland, South Carolina, California, Virginia, Connecticut and New York so do a lot of other people.

            It is good to have a driveway, no shared walls, a yard, a garage, and enough land for a flower garden. Backyards, swimming pools & decks are great places for socializing or just enjoying the outdoors.

            No guilt here. I am not adamantly demanding the right to keep burning up more than my share of fossil fuels. Would love to have my “all electric” home powered by an all nuclear fission grid.

   2. I think the extreme suburbanization of America would be a big problem when it comes to encouraging passenger rail travel. Rail travel is highly inconvenient if you need a car when you get to the other end…

      1. @ George,

         Help me out with this statement of yours : ‘Rail travel is highly inconvenient if you need a car when you get to the other end…’

         Would you care to elaborate? I smell a floating jab, but I may be wrong. You could need a car if you get to the other end of any trip, be it by car, train, boat, plane. No ?

         You have by far made some of the best posts over the last few months and I want to know where this one leads.

         1. My point is that while rail travel is excellent for travelling to downtown locations (because major stations are downtown, while parking a car downtown would be very difficult or expensive), it is very poor for travelling to suburban locations (which themselves are usually of too low a density to make it worthwhile to build rail lines linking to them). It is much more convenient to drive all the way to such a location, rather than get a train to the nearest station and then have to rent a car to travel the rest of the way…

   3. This advantage was not addressed.

      I most certainly addressed it the last time it came up. As someone who has lived in both the US and Europe, I can tell you that, just because something works for Europe, that doesn’t mean that it will work for the US.

      Your supposed “advantage” means that instead of everyone driving to the outskirts of town, where there is lots of space for roads and parking lots, they’ll be driving to the center of town with all of its congestion.

      Yeah … that idea is simply brilliant. Some “advantage.”

      1. @ Brian,

         A lot of people live downtown in what we call condos. So, if I use your logic, it would not make a lot of sense for them to drive to the outskirts of town from downtown where they have no parking issues, since they live there in the first place.

         Some advantage indeed.

      2. @ Brian,

         One has no choice to ‘drive’ from the suburbs to the airport which lies on the outskirts of town. Public transit is just not meant for that.

         But getting downtown from the suburbs using public transit is efficient in most North American towns. Taking a 200mph train is a totally different debate (and motivation) from that standpoint than having to take a 70mph camel that must yield priority to merchandise rail traffic.

         We need a change of mentality. And of course if gasoline was properly taxed here in North America for all of the economic externalities it causes …. but I won’t get into that.

         1. One has no choice to ‘drive’ from the suburbs to the airport which lies on the outskirts of town. Public transit is just not meant for that. But getting downtown from the suburbs using public transit is efficient in most North American towns.

            What? I don’t know about which towns you had in mind, but in most NA cities that I’ve been to, using public transportation to get downtown means driving to a big parking garage at the outskirts of town and catching a light-rail train in. It’s almost like driving to the big parking lots and garages that surround most NA airports, except that, at the airport, you’re already at your destination and get to skip the long train ride. I have no idea what leads you to believe that a system involving an extra train ride is somehow more “efficient.”

            On the other hand, setting up public transportation to go from downtown to an airport outside of town is downright simple. One or two bus routes can suffice. If there is enough demand to justify the cost, then a light-rail system can be built, which is again simple, because it involves a one-to-one connection.

            I note, however, that very few cities have built such a system, because in most cities in North America, the great majority of the population (particularly the ones who travel more frequently between cities) do not live downtown.

         2. @ Brian,

            I have worked in many North American cities. (Toronto, Montreal, Vancouver, Boston, Chicago etc.) Public transit does not require you to take a car to get to some light train system. You can walk to a bus stop near your home that can take you to such a light train, subway system. I have seen this hold for area as remote as 75 KM from downtown.

            But I grant you that your experiences can be as good as mine.

2. And of course, to close on my previous post, the high speed trains use base load electricity from nuclear plants.

3. When I talk high speed trains, I have the European paradigm in mind. 200 mph, no delays due to weather, predictable departure and arrival times. Access to a bathroom without having to make 20 football moves.

   And some god dawn confort for all those who are 6 feet 2 inches tall and would like to have some frigging leg room and don’t get into territorial fights with my left and right neighbours for elbow space. Yes, I can play hockey too if I must.

   When is North America going to join the civilized world and get a dedicated passenger train network? Wanna put America back to work and create value ? I say we stop clogging the airports for flights that are 1-2 hours long.

4. @ Rod,

   Your comment:

   If you design non-stops, you bypass a whole lot of customers or force them to drive to the hubs.

   My 2 bits:

   High speed trains in Europe come in direct competition with short duration flights. No stops. There is a market and it can work as a clean, competitive alternative.

   I am sure Boston – New York has a lot of flights per day. For 300 km? High speed trains takes a chunk out of that market in no time. Downtown to downtown here is a matter of less than an hour!

   Think of the time wasted at the airport, going and coming, security, rain, delays…. Let’s have North America join the civilized world. We have the means to improve on what Europe does.

   1. @Daniel – I understand your comment. I was fortunate enough to have worked in a place where there was a good airport virtually in the downtown area. Reagan National is connected to the DC Metro rail system and is within walking distance of a number of office complexes. In fact, I used to walk there from my office quite regularly. (I was a geographic bachelor part of the time I was working in DC.)

      The thing about the security delays is that they are self-imposed and baseless. I fondly remember a time when I could work until 5:00 pm walk about a half a mile, stroll through the terminal and be on a plane before 6. I would be sitting in my recliner in Florida before 8:30. We could decide tomorrow to end the security theater that makes that scenario unlikely these days.

      The idea that you would not have to mess with security on a train is only an assumption. It is also not true that trains avoid delays any better than aviation. There are actually more parts to the required system that can fail – including restrictions on rails themselves.

      1. Rod,

         We are talking about a dedicated rail system here. Only for passenger traffic. No cows, no merchandise, no road crossings.

         I think I am going to join the dark side for one day. Nuclear s**ks.

         Joking…

5. Anyway so much for the high speed train debate in the US. Studies have shown over and over again that americans when confronted to discretionary economic choices will cut on medication or food before they cut on their automobile related expenses and convenience.

   I was once on training in the US and I chose to walk the 3 miles from the hotel to the training center in Troy, Michigan. Oracle US coworkers saw me walking every morning on paths with no sidewalks. Called me crazy, for walking of course. Cops stopped me. Thought I was weird. I was the only not overweight guy in the class.

   It is just a fact.

   But I still maintain that distances in Europe, habitat density and suburbanization parameters be applied to the eastern US sea coast. It is a potential alternative to air transportation.

6. Priority #1: displace coal with nuclear. This eliminates something like 75% of rail traffic. Now, if Google can automate automobiles via video, GPS, computers etc., one would think it possible to do the same with self-powered electric “boxcars” to displace much of the inefficient trucking business. Further, with technological advances in materials science etc. I would expect overhead monorail type passenger transportation to supersede so-called local “light rail” which is anything but light. Overhead should be much safer and easier to route, vis a vis streets. And, with automation, one could have monorail systems that have dedicated city-to-city multi-passenger vehicles, without the necessity of stops, or with very few stops. The fast trains of China, Japan etc. may not be the penultimate in these matters.

7. Bullet trains work best on long straight-aways and the upper East Coast is way too congested to allow such bee-line route construction unless the gov’t is going to buy up several tens of billions in real estate. The Accella here only works alongside existing old rail routes because it uses the leaning car trick on curves but is still limited in the speeds it can take and anyway the width of the current trackbed and tunnels and trestles forbid multiple track which you’d painfully need for lots of extra trains if you’re going to transfer the passenger loads from airports to rail. For me, as land travel, I’d like to see the “superbus” concept (100 mph+) on dedicated Interstate lanes explored more or even flying river boat-ferries. I’d like to see atomic energy take the electric-generating place of coal so coal can be more sensibly converted into far cheaper petroleum-type products and plastics and feed and maybe even aviation fuel/hydrogen.

   IMHO,
   James Greenidge
   Queens NY

8. Energy prices are not only impacting the airline industry. They are also a factor in what is called ‘product redimensioning’ in the food industry.

   I am seeing it more and more. Over the last 3 months, my tapioca and coffee brands have both changed their looks and weights. My coffee passing from a 1 KG package to a 900 Grams offering.

   The price has of course remained the same. And your grocers association want you to believe that your grocery bills has not hanged over the last year. It is false. The dimension of the packaging is tricky. You think you have the same volume, but you don’t. The changes are subtle sometimes.

9. And now for something that can only happen in the US.

   The Devils are playing the Rangers in the NHL playoffs. It’s what we can call a subway serie In Canada. Now the Devils fans who have tickets for Madison Square Garden games are being begged to be faithful and sell their coveted tickets to Devils only fans.

   New Yorkers have heard of that and offered Devils fans to sell them their tickets at ‘market’ price plus a ‘hop’ on a flight from Newark to NYC. The flying time, Rangers fans argue, will beat the 17 minutes it takes to cross Lincoln tunnel.

   ONLY IN AMERICA.

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