scary speculations
Nov. 8th, 2005 10:51 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
chelidonsee below cut, excerpt from 'Things To Come', by Michael Ventura
So far, airfares have been kept artificially low by forward-looking managers at small, lean airlines like Southwest Air, who purchased low-cost multi-year fuel future contracts prior to the latest price spike. And that's part of the relentless economic pressure on the other airlines who don't have strong futures contracts in place. But eventually, even the longest-term of these contracts will expire, and true fuel prices will hit all of the airlines, resulting in drastic spikes in ticket prices and reduced service . And it's not just passenger air flight -- air cargo is a huge part of the U.S. economy, from FedEx and UPS to winter raspberries from New Zealand and $20 sneakers from China and Indonesia. As air cargo prices rise, local alternatives become not only attractive, but in many cases, could be all that's available at any price. I'll miss those winter strawberries :<
I hope against hope that the scenarios here are wrong, among other reasons, because I have much-loved people overseas and across the country from whom I would dearly hate to be separated. But regardless, it's a good time to get situated in a place where you would like to spend a lot of time, because rising fuel costs means that travelling by whatever method is not going to be getting any cheaper, and could become much more expensive over the next 5 years.
"People grasping at straws often argue, "Gas has been $6 a gallon in
Europe for years, whsat's the problem?" With Europe's national health
insurance, Europeans (and their businesses) aren't burdened with our
incredible health costs, which are due to rise 10% next year (The
Week, Sept. 23, p.8), while Medicare premiums will rise 13% (NY
Times, Sept. 17, p.8). The average American family health policy is
now $11,000 yearly (USA Today, Sept. 15, p.1B); next year's 10% hikes
raise that figure to $12,100. If we weren't shelling out so much
money to insurance companies, we could absorb $6 a gallon too. (Even
some conservatives are realizing that national health insurance would
lift an enormous burden from large and small businesses as well as
consumers.) More importantly, most Europeans don't need a car and
most Americans do, because Europe is structured around cities while
America is structured around suburbs. Minus the sparsely populated
stretches of Norway, Sweden, and Finland, Europe is roughly half the
size of the U.S., so its transport costs are half. Finally and
crucially, Europe has the finest rail system in the world. We've let
ours go to the dogs, though railroads are the cheapest way to carry
people and cargo (more on this in future columns). Also, Europeans
recognize the importance of global warming and peak oil. As Jeff
Immelt, the CEO of General Electric, recently said, " Europe today is
the major force for environmental innovation. European governments
have encouraged their companies to invest [in] and produce clean
power technologies." (NY Times, Sept. 21, p.25) Europe has big
problems too, but has positioned itself intelligently for the 21st
century. America still clings to the 20th, and we're about to pay for
that.
With its excellent rail system, Europe is far less dependent
(internally) upon air travel. That is tonight's subject. More than
pump prices, and perhaps more than heating-oil prices, the first
drastic change for middle-class and more-or-less affluent Americans
will be their inability to fly.
In the last year, the price of jet fuel has risen 50% (NY Times,
Sept. 15, p.C1). The airlines have desperately tried to absorb this
price hike, keeping fares low and hoping for the best. But those days
will be over by Easter, if not Thanksgiving. USA Today, Sept. 15,
p.1B: "The airline's jet-fuel bill this year will be about $3.3
billion [a pre-Rita figure], up from $2.2 billion last year and $1.6
billion in 2003." That article notes that four of our seven largest
airlines are now in Chapter 11: "51% of the USA's top 12 airlines is
now operating under bankruptcy protection." The article quotes James
May, CEO of the Air Transport Association: "No business model of any
airline can survive with sustained jet-fuel prices of $90 to $100 a
barrel." Yet those are exactly the prices predicted by many experts
in the relatively near future; a major natural or manmade disruption
could bring them about in a day. There is no relief in sight. This
situation cannot be sustained. The average driver may be able to
absorb fuel costs for a few years more, but not the average flier.
Within a year ˆ or two, or three? ˆ affordable passenger flight will
be history.
What will that mean in real life?
Airfares will skyrocket. Schedules will be pared to the bone. If
you're not rich, and if your lifestyle includes hopping planes when
you choose ˆ you're grounded. As airlines fail and the surviving
carriers cut back, flights will be fewer, especially to smaller
cities. Some areas will lose service altogether unless the government
mandates that every city of under half a million people must get,
say, two flights a week. Conventions and conferences of every
description will be beyond the means of any but the wealthy. The
average person won't be able to jet to the wedding, sick bed, or
funeral of a loved one. Even if you can scrounge the money for a
ticket, there may not be a flight. Music and film festivals that
can't be sustained locally will be a thing of the past (unless and
until rail service is restored). Families will think twice about
letting their kids apply to colleges hundreds or thousands of miles
from home. Family members who live scattered all over the country
will see one another rarely, if at all (again, unless and until rail
service is restored). None but the rich will vacation in far-off
places ˆ and "far off" will come to mean any place beyond two tanks
of gas. The gaudy entertainments that depend on flight in places like
Orlando and Las Vegas will dry up and blow away. The real estate
value of summer homes or winter playgrounds will fluctuate wildly;
those accessible mainly by air will plunge. Flight's ancillary
industries ˆ hotels, restaurants ˆ will hit bottom, displacing and
impoverishing many hard-working people. Tourism as we know it, an
industry merely decades old, will not survive. Nor will such minor
luxuries as next-day delivery. Mega-airports and mega-hotels will
become ghostly caverns, monuments to a failure of foresight.
What good could possibly come of this? Well, for starters, if it
happens soon enough it may save many millions of lives. The
Economist, Aug. 6, p.10: "[E]xperts now believe a global outbreak of
pandemic flu is long overdue, and the next one could be as bad as the
one in 1918 [before passenger flight], which killed somewhere between
25 and 50 million people." The Times, Sept. 22, p.12: "Just as
governments around the world are stockpiling millions of doses of flu
vaccine and antiviral drugs in anticipation of a potential influenza
epidemic, two new surprising research papers ... have found that such
treatments are far less effective than previously thought." The
experts' greatest fear has been that air travel will spread the
disease uncontainably before its symptoms are obvious, raising the
casualty rate into the hundreds of millions. Without convenient air
travel, that's unlikely.
Another benefit: 9/11 turned the U.S. into a no-fly zone for three
days. There were many reports that air quality throughout the country
(after just three days!) was measurably much better. Drastic
curtailment of flight would not only make our environment healthier,
but would probably do more to slow global warming than the full
enforcement of the Kyoto Treaty, and do it quicker.
So far, airfares have been kept artificially low by forward-looking managers at small, lean airlines like Southwest Air, who purchased low-cost multi-year fuel future contracts prior to the latest price spike. And that's part of the relentless economic pressure on the other airlines who don't have strong futures contracts in place. But eventually, even the longest-term of these contracts will expire, and true fuel prices will hit all of the airlines, resulting in drastic spikes in ticket prices and reduced service . And it's not just passenger air flight -- air cargo is a huge part of the U.S. economy, from FedEx and UPS to winter raspberries from New Zealand and $20 sneakers from China and Indonesia. As air cargo prices rise, local alternatives become not only attractive, but in many cases, could be all that's available at any price. I'll miss those winter strawberries :<
I hope against hope that the scenarios here are wrong, among other reasons, because I have much-loved people overseas and across the country from whom I would dearly hate to be separated. But regardless, it's a good time to get situated in a place where you would like to spend a lot of time, because rising fuel costs means that travelling by whatever method is not going to be getting any cheaper, and could become much more expensive over the next 5 years.
"People grasping at straws often argue, "Gas has been $6 a gallon in
Europe for years, whsat's the problem?" With Europe's national health
insurance, Europeans (and their businesses) aren't burdened with our
incredible health costs, which are due to rise 10% next year (The
Week, Sept. 23, p.8), while Medicare premiums will rise 13% (NY
Times, Sept. 17, p.8). The average American family health policy is
now $11,000 yearly (USA Today, Sept. 15, p.1B); next year's 10% hikes
raise that figure to $12,100. If we weren't shelling out so much
money to insurance companies, we could absorb $6 a gallon too. (Even
some conservatives are realizing that national health insurance would
lift an enormous burden from large and small businesses as well as
consumers.) More importantly, most Europeans don't need a car and
most Americans do, because Europe is structured around cities while
America is structured around suburbs. Minus the sparsely populated
stretches of Norway, Sweden, and Finland, Europe is roughly half the
size of the U.S., so its transport costs are half. Finally and
crucially, Europe has the finest rail system in the world. We've let
ours go to the dogs, though railroads are the cheapest way to carry
people and cargo (more on this in future columns). Also, Europeans
recognize the importance of global warming and peak oil. As Jeff
Immelt, the CEO of General Electric, recently said, " Europe today is
the major force for environmental innovation. European governments
have encouraged their companies to invest [in] and produce clean
power technologies." (NY Times, Sept. 21, p.25) Europe has big
problems too, but has positioned itself intelligently for the 21st
century. America still clings to the 20th, and we're about to pay for
that.
With its excellent rail system, Europe is far less dependent
(internally) upon air travel. That is tonight's subject. More than
pump prices, and perhaps more than heating-oil prices, the first
drastic change for middle-class and more-or-less affluent Americans
will be their inability to fly.
In the last year, the price of jet fuel has risen 50% (NY Times,
Sept. 15, p.C1). The airlines have desperately tried to absorb this
price hike, keeping fares low and hoping for the best. But those days
will be over by Easter, if not Thanksgiving. USA Today, Sept. 15,
p.1B: "The airline's jet-fuel bill this year will be about $3.3
billion [a pre-Rita figure], up from $2.2 billion last year and $1.6
billion in 2003." That article notes that four of our seven largest
airlines are now in Chapter 11: "51% of the USA's top 12 airlines is
now operating under bankruptcy protection." The article quotes James
May, CEO of the Air Transport Association: "No business model of any
airline can survive with sustained jet-fuel prices of $90 to $100 a
barrel." Yet those are exactly the prices predicted by many experts
in the relatively near future; a major natural or manmade disruption
could bring them about in a day. There is no relief in sight. This
situation cannot be sustained. The average driver may be able to
absorb fuel costs for a few years more, but not the average flier.
Within a year ˆ or two, or three? ˆ affordable passenger flight will
be history.
What will that mean in real life?
Airfares will skyrocket. Schedules will be pared to the bone. If
you're not rich, and if your lifestyle includes hopping planes when
you choose ˆ you're grounded. As airlines fail and the surviving
carriers cut back, flights will be fewer, especially to smaller
cities. Some areas will lose service altogether unless the government
mandates that every city of under half a million people must get,
say, two flights a week. Conventions and conferences of every
description will be beyond the means of any but the wealthy. The
average person won't be able to jet to the wedding, sick bed, or
funeral of a loved one. Even if you can scrounge the money for a
ticket, there may not be a flight. Music and film festivals that
can't be sustained locally will be a thing of the past (unless and
until rail service is restored). Families will think twice about
letting their kids apply to colleges hundreds or thousands of miles
from home. Family members who live scattered all over the country
will see one another rarely, if at all (again, unless and until rail
service is restored). None but the rich will vacation in far-off
places ˆ and "far off" will come to mean any place beyond two tanks
of gas. The gaudy entertainments that depend on flight in places like
Orlando and Las Vegas will dry up and blow away. The real estate
value of summer homes or winter playgrounds will fluctuate wildly;
those accessible mainly by air will plunge. Flight's ancillary
industries ˆ hotels, restaurants ˆ will hit bottom, displacing and
impoverishing many hard-working people. Tourism as we know it, an
industry merely decades old, will not survive. Nor will such minor
luxuries as next-day delivery. Mega-airports and mega-hotels will
become ghostly caverns, monuments to a failure of foresight.
What good could possibly come of this? Well, for starters, if it
happens soon enough it may save many millions of lives. The
Economist, Aug. 6, p.10: "[E]xperts now believe a global outbreak of
pandemic flu is long overdue, and the next one could be as bad as the
one in 1918 [before passenger flight], which killed somewhere between
25 and 50 million people." The Times, Sept. 22, p.12: "Just as
governments around the world are stockpiling millions of doses of flu
vaccine and antiviral drugs in anticipation of a potential influenza
epidemic, two new surprising research papers ... have found that such
treatments are far less effective than previously thought." The
experts' greatest fear has been that air travel will spread the
disease uncontainably before its symptoms are obvious, raising the
casualty rate into the hundreds of millions. Without convenient air
travel, that's unlikely.
Another benefit: 9/11 turned the U.S. into a no-fly zone for three
days. There were many reports that air quality throughout the country
(after just three days!) was measurably much better. Drastic
curtailment of flight would not only make our environment healthier,
but would probably do more to slow global warming than the full
enforcement of the Kyoto Treaty, and do it quicker.
