Metro Orlando Airport News

[JRS1]

I wonder if GOAA would fund or partially fund the Jetblue dorm as part of a capital improvement expense-- unless that means that gate fees from other airlines become involved which would be bad...

[shardoon]

i must say that im a little shock at this. american was always the airline that could get you to pretty much any caribbean island. it actually almost looks like they are scaling back their san juan hub for carib flights. i have travelled on most of the mco-sju AA flights from orlando. i must say that for the most part..... they were always packed. these oil prices are messing with everything. it looks like jet blue is more than willing to jump into the void since they are going to add an additional 2 daily flights to sju (not in the article). with fingers crossed..... maybe they will really open up to the carib from mco since AA has clearly taken a small step back and fly to other islands like the VI, sxm, antigua, etc out of mco as their new latin hub. although it is wishful thinking nowadays..... not with oil at $135-140...... but it will definetely be easier for them in the future with AA scaled back.

http://translate.google.com/translate?hl=e...l%3Den%26sa%3DG

[bic]

Between August 18 and September 1, Delta will begin terminating several routes serving MCO. The axed cities include:

Columbus

Knoxville

Louisville

Nassau

Panama City, FL

Raleigh

Richmond

[Boomer136]

Anyone else get that open letter from the airline CEO's about commodity trading on oil? More importantly, what do the people who know think about it?

[bic]

JetBlue is going to begin flying nonstop between MCO and Richmond, VA (RIC) on November 2, 2008, using a 100-seat Embraer E-190.

Yahoo Business Article

[NewsDude]

Damn MCO is getting hurt bad with the oil prices and the airlines scrambling. Can all of these cutbacks and losses affect Orlandos rankings nationaly?

Edited July 16, 2008 by NewsDude

[neon9]

Anyone else get that open letter from the airline CEO's about commodity trading on oil? More importantly, what do the people who know think about it?

This is what Ben Bernanke said today to congress:

On the supply side, despite sharp increases in prices, the production of oil has risen only slightly in the past few years. Much of the subdued supply response reflects inadequate investment and production shortfalls in politically volatile regions where large portions of the world's oil reserves are located. Additionally, many governments have been tightening their control over oil resources, impeding foreign investment and hindering efforts to boost capacity and production. Finally, sustainable rates of production in some of the more secure and accessible oil fields, such as those in the North Sea, have been declining. In view of these factors, estimates of long-term oil supplies have been marked down in recent months. Long-dated oil futures prices have risen along with spot prices, suggesting that market participants also see oil supply conditions remaining tight for years to come.

The decline in the foreign exchange value of the dollar has also contributed somewhat to the increase in oil prices. The precise size of this effect is difficult to ascertain, as the causal relationships between oil prices and the dollar are complex and run in both directions. However, the price of oil has risen significantly in terms of all major currencies, suggesting that factors other than the dollar, notably shifts in the underlying global demand for and supply of oil, have been the principal drivers of the increase in prices.

Another concern that has been raised is that financial speculation has added markedly to upward pressures on oil prices. Certainly, investor interest in oil and other commodities has increased substantially of late. However, if financial speculation were pushing oil prices above the levels consistent with the fundamentals of supply and demand, we would expect inventories of crude oil and petroleum products to increase as supply rose and demand fell. But in fact, available data on oil inventories show notable declines over the past year

If you look at what happened today, where oil fell $6 (and was down by about 9 at one point), I believe that is about the limit of 'speculators'. This happens to be an options expiration week, last month around this time there were several large dips and gains.

It's just impossible to impact the price of a commodity for very long unless you actually take delivery of the product. Where are you going to hold a major portion of the 86 million barrels of oil the world uses per day?

For instance, the Hunt brothers cornered the silver market because they actually took control of something like 50% of the worlds supply of silver. The world's largest reserve of crude oil, the US SPR, is only 700 million barrels....enough to supply the world for a little over a week.

[Boomer136]

^ I just got another Airline sending me the same letter. If I could fly the same airline I could probably get more than a free packet of peanuts each year, but such is not the case...

Anyway, the letter says that the oil is traded on paper multiple times, no one actually takes delivery during this time, its just a false demand, and hidden to the other players in the market so they don't know if they are bidding against other true users or speculators and they say this skews the price discovery system to the tune of $30-$50 per barrel. The airline CEO's cite relaxed oversight, which considering the track record of the government recently, sounds plausible to me. Also, they think this can't go on for very long either, but long enough to do a lot of damage to their industry.

Personally, I am always skeptical of folks crying about the reasons for their industry's downturn. Which is why I throw this out here, and may seem to be their advocate, a true devil's advocate if you will.

Here is a link:

http://www.stopoilspeculationnow.com/site/page/the_problem

As the great '80's movie asked: "Does their argument hold water?"

[Go Gators]

Damn MCO is getting hurt bad with the oil prices and the airlines scrambling. Can all of these cutbacks and losses affect Orlandos rankings nationaly?

I would say that most airports around the country are feeling the same thing. High oil prices effect all airlines at all airports, not just OIA.

[FLheat]

I would say that most airports around the country are feeling the same thing. High oil prices effect all airlines at all airports, not just OIA.

No, not all airports are created equal. The hubs will experience less cuts. Here is the scenario the Orlando Sentinel reported a few weeks back:

Average Daily Departing Seats

Oct. 2007 Oct. 2008 Change

From OIA 59,177 52,308 -11.6%

From MIA 55,260 55,154 -0.2%

Based on the projections Orlando will fall behind Miami as the busiest airport in the state.

[bulldogger]

I haven't looked into that article, but I can imagine this is due to Miami having more business travelers and Orlando having more vacation travelers.

[Go Gators]

No, not all airports are created equal. The hubs will experience less cuts. Here is the scenario the Orlando Sentinel reported a few weeks back:

Average Daily Departing Seats

Oct. 2007 Oct. 2008 Change

From OIA 59,177 52,308 -11.6%

From MIA 55,260 55,154 -0.2%

Based on the projections Orlando will fall behind Miami as the busiest airport in the state.

Good point. It makes sense hubs will not be effected as much. I should have used "most" airports the second time as well instead of "all."

[FLheat]

I haven't looked into that article, but I can imagine this is due to Miami having more business travelers and Orlando having more vacation travelers.

Here was the article: Airport Cuts

Miami having more international travel is their redeeming grace. Orlando just has too cheap of flights. Memo to airlines: Raise your prices! I don't understand why an airline would cut serving a soda that costs them $.05 and not raise the price of the flight $.10 instead.

[neon9]

^ I just got another Airline sending me the same letter. If I could fly the same airline I could probably get more than a free packet of peanuts each year, but such is not the case...

Anyway, the letter says that the oil is traded on paper multiple times, no one actually takes delivery during this time, its just a false demand, and hidden to the other players in the market so they don't know if they are bidding against other true users or speculators and they say this skews the price discovery system to the tune of $30-$50 per barrel. The airline CEO's cite relaxed oversight, which considering the track record of the government recently, sounds plausible to me. Also, they think this can't go on for very long either, but long enough to do a lot of damage to their industry.

Personally, I am always skeptical of folks crying about the reasons for their industry's downturn. Which is why I throw this out here, and may seem to be their advocate, a true devil's advocate if you will.

Here is a link:

http://www.stopoilspeculationnow.com/site/page/the_problem

As the great '80's movie asked: "Does their argument hold water?"

I think without a detailed knowledge of economics and market theory, it's hard for the average person to understand it...including myself.

In this respect I have to defer to other's arguments, and my own noting of other issues...like that the prices for steel, such as rebar (how I heard about it) has been rising just as fast as oil, at least as of a month or two ago. There is no futures market for steel.

Rhodium has increased to $10k an ounce in the past 5 years...and the only way you can invest in it is by buying a mining company's stock.

Would limiting futures trading help the 'price discovery' system?

http://online.wsj.com/article/SB1215472930...=googlenews_wsj

In 1958, Congress officially banned all futures trading in the fresh onion market. Growers blamed "moneyed interests" at the Chicago Mercantile Exchange for major price movements, which could sink so low that the sack would be worth more than the onions inside, then drive back up during other seasons or even month to month.

Also, what is the actual cost?

Let's see what the average offshore cost per barrel is in the US...espically for offshore, the great hope of those who would advocated 'drill here, drill now'.

http://www.eia.doe.gov/neic/infosheets/crudeproduction.html

They were $70 a barrel 2 years ago, and increasing 35% a year.

Edited July 16, 2008 by neon9

[NewsDude]

I haven't looked into that article, but I can imagine this is due to Miami having more business travelers and Orlando having more vacation travelers.

And in the meantime international traveling is solid and growing which is MIAs stropng point while domestic traveling is being affected more and thats MCOs strong point, so it does make sense.

[JRS1]

I wonder if another carrier can step in and take over routes which were cut by airlines like Delta, for instance.

also, if smaller routes were cut, doesn't it follow that some of the next closest routes would take some of that lost business?

[gibby]

I have heard rumors this week of a new Orlando-Sao Paulo non-stop flight on Tam Airlines. This would be great as the Brazilians spend a lot here in general and with the dollar circling the bowl, they can buy even more stuff.

[Boomer136]

I have heard rumors this week of a new Orlando-Sao Paulo non-stop flight on Tam Airlines. This would be great as the Brazilians spend a lot here in general and with the dollar circling the bowl, they can buy even more stuff.

Ole, ole ole ole....ole...ole. Tudo bem!

[Camillo Sitte]

The Lufthansa [LH] MCO-FRA non-stop flight will be going to daily [7-days/week] service in late October and the equipment has been "upgraded" to an A340-600 but First Class service has been dropped.

Edited July 28, 2008 by Camillo Sitte

[WeNeed2Progress]

Ole, ole ole ole....ole...ole. Tudo bem!

Show de bola?

[FLheat]

DayJet is operating an Air Taxi out of Executive, kind of a neat concept.

DayJet

[bic]

Preparing for service cuts by airlines, Orlando International Airport postpones projects

Orlando Sentinel Article

[NewsDude]

What a surprise.

[JRS1]

a lot of airports are getting hit, it seems. I wonder how long b4 McCarren gets hit really hard once the casinos slow down financing peoples' airfare...

[bic]

Pending government approval, Brazil's TAM Airlines will begin scheduled service between MCO and Sao Paulo (GRU) in November. The flight will initially operate 4x weekly and will eventually go 1x daily with a high-density 767-300.