Wednesday August 23, 2006

Northwest Airlines suggests dumpster diving for axed workers

chron.com, thesmokinggun.com :

Bankrupt Northwest Airlines advised workers to fish in the trash for things they like or take their dates for a walk in the woods in a move to help workers facing the ax to save money. The tips were put in a booklet handed out to about 50 workers and posted for a time on its employee Web site. The section, entitled "101 ways to save money," does not feature in new versions of the booklet or the Web site.

The four-page booklet, "Preparing for a Financial Setback" contained suggestions such as shopping in thrift stores, taking "a date for a walk along the beach or in the woods" and not being "shy about pulling something you like out of the trash." Prepared with the help of an outside company, the booklet encourages employees to manage their money better and prepare for financial emergencies.

- What an insult. Going from "sorry, you have been chopped" to "look in the dustbin for something you like". Worse than a slap in the face.

(2006-08-23 23:59:13 SGT) [Biz] Permalink

Airlines tremble at prospect of $100 oil

peakoil.com -> usatoday.com :

Beleaguered U.S. airlines seem to have slowly staggered to their feet since the terrorism and recession of earlier this decade. But credit agency Standard & Poor's has come up with a worrisome scenario that could knock them back down: $100-a-barrel oil. What S&P sees at the $100-a-barrel level isn't pretty: Northwest and Delta airlines could be forced to liquidate; others could be pushed into Chapter 11 bankruptcy-court protection. Discount giant Southwest would likely see its remarkable profit streak halted. Industrywide, carriers would ground aircraft, cut service and lay off workers. Travelers could count on fewer choices, more travel hassles and higher fares.

According to the ATA, a 33% jump in crude prices, from $75 a barrel to $100, would increase the industry's fuel bill by $32.5 million a day. Over a year, the damage would total $11.7 billion. That's a staggering sum to an industry that collectively lost $42 billion in the five years ended in 2005. Fewer people would be willing to pay higher fares, because $100 oil would mean paying more to fill their cars, more for groceries delivered by truck, more for home energy - more for just about everything. And that would create a kind of vicious cycle for the airlines: fare increases driving away business, thereby increasing pressure to raise fares again.

See also :

1. $100 oil would threaten airlines: IATA economist
2. Airlines worldwide set to lose $3 billion this year
3. Airlines cram more fliers into fewer seats, flights

(2006-08-23 19:00:15 SGT) [Biz] Permalink

Car-sales indicator suggests recession is near or already here

peakoil.com -> nytimes.com :

If things are miserable for America's new-car dealers, can a recession be averted? History says it cannot and suggests a downturn may have already begun. Using the year-on-year rate of change in sales by new-car dealers, the rule - unveiled here for the first time - is that if the figure is down 2% or more, a recession is either under way or set to begin within a few months. The figure fell to -2.4% for June sales figures. The "dealer doldrums indicator" called five of the six recessions going back to 1968. It has never warned of a recession that did not occur.

No indicator is perfect, of course, and this one was developed knowing when the earlier recessions had occurred. But it makes sense because there are often cheaper alternatives to new-car dealers, whether for service or for buying used cars. So such dealers are likely to lose market share when times turn bad, pinched as they are by the slumping real estate market and soaring gasoline prices. Dealers are hurting. The rest of us may soon share their pain.

See also :

1. All signs point to an economic slowdown
2. Housing dream fades at petrol pump

(2006-08-23 12:57:25 SGT) [Biz] Permalink

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