Greece will have an orderly exit if it leaves the Euro without bankruptcy

May 23 (Bloomberg) — Bloomberg’s Sara Eisen reports that if Greek leaders decide to leave the euro, they would likely only have 46 hours to complete the transition over a weekend. Sara looks at the issues the Greek government would need to deal with in that timeframe. She speaks on Bloomberg Television’s “Inside Track.” (Source: Bloomberg) 
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A lot depends on the election results on June, where there is a 50/50 chance that Greek elections may decide to abandon the World Bank/IMF bailout plan, when it is confirmed, there will not be any money coming from World Bank/IMF, but there is a EU firewall that will give Greece some time to prepare it’s Drachma, which will be devalued when launched, the problem will be how Greece will handle it’s debts when it is due, if Greece could enlist the help of World Bank/IMF to renegiotiate a deal with it’s creditors thru debt insurance and getting a higher loan with a longer time frame but paying a slightly higher interest, I am confident this can be achieved, but all parties must work together to achieve this, this is a worst case scenerio, and most likely EU will step in before this happens, so a Greece bankruptcy is unlikely. 
Don’t believe what I say? I have an incredible ability to see any scenerios and calculating the most likely events to happen, I am dead accurate so many times with God assisting me. Want to lay a bet?
God place me here for a reason, and nothing spectacular will happen during my watch, because my God is not a God of mayhem and chaos.
– Contributed by Oogle.

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Plane-makers walk the line on golden age, demand could fuel specialisation eg supersonicjet, where is the bubble?


CHICAGO | Tue May 22, 2012 8:39pm EDT

(Reuters) – From a chilly perch in Burnsville, Minnesota, Tim Zemanovic has an usual perspective on the global aircraft market, which is booming – some say overheating – as the world’s largest plane-makers pump out jets as fast they can.
Zemanovic, the head of Aircraft Demolition, a company that tears down and recycles unwanted airplanes, says his five-year-old business has never been stronger as airlines expand and replenish their fleets with fuel-efficient planes.
“This year, I expect to do double the work we did last year,” he said. The company destroyed 24 planes in 2011, and an industry trade group estimates more than 12,000 aircraft will be retired in the next 20 years.
Zemanovic’s story reflects a golden age for commercial plane-making – where strong air traffic, underpinned by stunning economic expansion in China and India, supports demand for new jets and there is no shortage of third parties willing to finance those purchases.
Or it may be evidence of unsustainable demand.
HOT PACE
As Boeing Co (BA.N) and Airbus (EAD.PA) race to bag as many orders as possible, they are ramping up production 57 percent by value between 2011 and 2014, according to some estimates, with hot-selling narrowbodies – single-aisle planes with about 150 seats – leading the way.
But the pace comes with risk, according to experts who say manufacturers are taking more orders than they can expect to deliver.
An order bubble is swelling, they say, and warn it is possible that if some shock to the chronically unstable airline industry – volatile fuel prices, terror attacks, economic recession – makes airlines rethink their expansion plans or replenishment needs, demand could sink, aircraft values could fall and planes could roll off assembly lines without buyers.
“The problem with a bubble is you don’t know it is a bubble until it bursts and then everyone wants to get out,” said Adam Pilarski, senior vice president at AVITAS, an airline consulting company that also works with aircraft lessors and lenders.
Some airlines already are rethinking their purchase plans. On May 16, Southwest Airlines Co (LUV.N), a loyal Boeing customer, deferred deliveries of 30 Boeing 737s it was to receive in the coming two years, aiming to save more than $1 billion in capital spending. Earlier this month, Australian carrier Qantas (QAN.AX) delayed delivery of two Airbus A380s to help cut spending.
Moreover, critics say the airlines’ scramble for new planes comes on top of a rise in aircraft orders from third-party buyers like aircraft leasing companies that essentially bear the risk of aircraft ownership for operators.
This rise in speculative activity has already stretched the demand for aircraft in markets like India that have seen rapid expansion but where several carriers now face financial problems.
“I believe there is a bubble, and it is important to think about what happens when it bursts and what happens with aircraft retirements and values,” Pilarski said.
Indeed, Zemanovic said Aircraft Demolition is chopping up younger and younger planes for scrap. The company recently destroyed a well-used 10-year-old Boeing 737, which typically has a life cycle of closer to 30 years, because its Saudi Arabian owner wanted a newer model and decided the parts of its 737 had more value than an intact plane.
The list prices for new planes did not decline during the last recession, but Boeing and Airbus have accused each other in the past of granting steep discounts to win a price war.
$4 TRILLION MARKET
Aircraft manufacturers are aware of the risk, but they stand by their forecasts.
“The last thing we want to do is build more airplanes than the market needs,” said Randy Tinseth, vice president of marketing for Boeing Commercial Airplanes.
“If we do that, the values of our airplanes go down, the residual values go down for our customers. It’s not good for us. It’s not good for our customers.”
Boeing and Airbus, which dominate the market for large jets, are both predicting a staggering $4 trillion market for new jets over the next 20 years with a sharp increase in deliveries.
Boeing forecasts a market for 33,500 new passenger planes and freighters between 2011 and 2030 thanks to robust growth in China, India and other emerging markets.
Population growth, urbanization and a burgeoning middle class with extra disposable income are underpinning the sharp growth in aviation demand in the world’s two most populous nations, China and India.
India’s domestic network alone is expected to generate the world’s fastest air traffic growth over 20 years. Manufacturers say the prospects for growth are further spurred by the low starting point, reflecting the dominance of rail.
To meet anticipated aircraft demand, Boeing is ramping up production on all of its commercial programs – most notably the narrowbody 737, which is going to 42-a-month from the current 35-a-month. Airbus is also increasing production on its competing A320 narrowbody jet to 42 planes a month from the current rate of 40 per month.
Together, the rate increases for the two narrowbodies represent perhaps the most ambitious peacetime ramp-up in airplane production and draw on an increasingly global supply chain. Airplane production is already at record levels.
Both plane-makers are revamping these best-selling 150-seat jets from mid-decade with new engines to deliver fuel savings of 15 percent. The decision sparked a stampede of orders even as storm clouds gathered over the economy and European banks scaled back exposure to the sector due to the region’s debt crisis.
Popularity of the upgraded narrowbodies is sure to erode the value of the earlier generations, but soaring fuel prices keep pressure on airlines to stock their fleets with the most fuel-efficient planes.
“Fuel prices have gone up significantly in recent years and all the forecasts are that they will remain high, and you simply can’t compete if you are operating an older aircraft that is maybe burning 15-20 percent more fuel than your competitor,” said Tony Tyler, director general of the International Air Transport Association (IATA).
TUNING OUT GURUS
Airbus sales chief John Leahy dismissed talk of a production bubble and defended the industry’s demand projections.
“I have been selling commercial airliners for 28 years. Approximately every five years we go through the cycle of industry gurus predicting asset bubbles, shortage of financing and imminent collapse. It hasn’t happened yet, and it won’t,” Leahy told Reuters.
In May, both Boeing and Airbus parent EADS posted higher quarterly profits helped by commercial aircraft sales.
Neither manufacturer is saying demand growth will happen in a straight line without upsets or airline failures on the way. Both believe the combination of hundreds of old planes needing replacement and emerging market growth will hold up demand.
“This industry doubles every 15 years in seat-mile capacity, the demand side of the equation. That is one of the strongest growth stories you can see. It is hard to imagine an asset bubble in the supply side when you are feeding into an industry that is doubling in size every 15 years,” Leahy said.
Boeing’s Tinseth said that in the last 10 years, cancellation or conversions affected less than 2 percent of the backlog, underlining real demand for the aircraft. That means that more than 98 percent of the company’s orders were filled.
Furthermore, Boeing and Airbus typically overbook their delivery slots to ensure they always have a buyer for planes if another customer cancels or defers an order.
CYCLES, BUBBLES AND VICTIMS
Some observers believe the highly cyclical aircraft market is overdue for a correction.
Airbus and Boeing notched up a combined 2,529 orders in 2011, the highest number since a record 2,881 in 2007. Orders plummeted in 2008 and again in 2009 amid economic recession. But they picked up the following year.
Through it all, deliveries – which is when airlines get paid – held strong, suggesting airline customers have a strong commitment to their growth and fleet replacement plans – at least for now.
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Graphic on aircraft demand link.reuters.com/wet38s
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The fact that combined deliveries dipped only 4 percent in 2008 from 2007 – Airbus deliveries actually rose – reveals a departure from the historical trends that suggest deliveries should shadow the rest of the economy, said Richard Aboulafia, aerospace analyst at Teal Group.
“Any other previous event that even vaguely resembled this would have produced a painful downturn,” he said, adding that jet-makers may eventually have to curb production rates to match weaker demand.
“There’s nothing wrong with taking orders,” he said. “It’s the production ramp-up that is an issue.”
For Boeing, Aboulafia said a more appropriate production rate on narrowbodies is less than 40 per month, compared with its plans to build 42 each month.
IATA has warned that its airlines worldwide face more than $8 billion in losses this year if Europe’s politicians fail to come to grips with the region’s debt crisis.
Some economists fear that deeper turmoil in the 17-nation currency area could spill over to other regions and cripple the Asian profit machine that underpins recent orders.
If anticipated demand fails to materialize, plane-makers are not the only ones that might be hurt.
“You could say there’s a new aircraft production bubble,” said John Walsh, an aerospace consultant at Walsh Aviation.
“And if that bursts, then people who have built brand new plants and have excess capacity as suppliers will be hung out to dry for a little while until the market catches up with them.”
(Reporting by Kyle Peterson; Additional reporting by Tim Hepher in Paris; Editing by Patricia Kranz and Matthew Lewis)

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Full-service carriers need to diffentiate their branding via special service for business class (eg VVIP conceirge service) I can think of so many ways ie special checkin no-fuss counters, the conceirge takes care of everything even helping to checkin to hotels, a “Siri special service” to handle all demands of the VVIP guest etc. even a nanny service to take care of kids (in doing so I can increase air ticket by up to 50% for this special service and there will be a great demand, because these clients do not want the hassle of budget airlines) – Contributed by Oogle.

By Yvonne Chan | Posted: 24 May 2012 2024 hrs
SINGAPORE : Things are looking bleak for full-service airlines.
The long haul market for carriers has been hit by falling demand due to the eurozone crisis and high oil prices.
Analysts say these carriers need to rethink their operating strategies, which include putting more aircraft into intra-Asia routes.
There are many signs of turbulent times in the industry.
Australia’s national carrier Qantas has an impending 500 job cuts on the way.
Both Singapore Airlines and Cathay Pacific have reported lower profits and are retiring older aircraft.
With consumers turning to cheaper flights, full-service carriers are re-thinking strategies.
Paul Ng, Global Head of Aviation at Stephenson Harwood, said: “There’s a very stable low-cost passenger base and the segment of the market that’s been squeezed somewhat in these times of austerity is the business class segment.
And many of the carriers are reconfiguring their aircraft to meet these challenges or perhaps to split their business so part of their business focuses on the growing segments of their passenger clientele. ”
He added: “Other cost items are obviously manpower. And the cost of financing their aircraft – financing costs – have also have been going up. So all round, they’ve had to look for more revenue just to break-even because many of their costs that they’ve tried to mitigate is not totally within their control.”
SIA says it will grow its offshoots SilkAir and Scoot to offset lower volumes in long-haul flights.
It also halted flights to Athens and Abu Dhabi due to weak demand.
Meanwhile, experts say passenger travel in developing markets like China and India will remain buoyant ..
According to the Xinhua News Agency, China plans to buy more than 2,500 commercial aircraft from 2011 to 2015, bringing the country’s total fleet size to more than 4,500 jets.
But there are others eyeing the same pie.
Siva Govindasamy, Asia Managing Editor of Flight Global, said: “Look at the likes of Garuda, look at the likes of MAS. In China you have China Southern, China Eastern, these airlines are really upping the game. Where previously passengers used to fly into Singapore or Hong Kong and then onwards elsewhere, the domestic carriers are now offering them the option to fly directly there.
So SQ, Cathay, Qantas need to react to that. They need to react and adapt to the new market where they not only have to face up to high fuel prices but also competitors who are upping the game and that’s going to be the key thing in the coming years.”
Full service carriers have have had their fair share of challenges this year and as the global economic uncertainty continues and oil prices remain volatiles, experts say these carriers are likely to cut back on long haul routes to Europe and the US and increase the frequencies of short-haul popular routes within Asia Pacific.

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$10 TRILLION MARKET and it is sustainable because there is no shortcut to air travel, there will be a great demand for specialisation, where the capacity and the quick travel times of the supersonic jet will fill the gap, look at how the second tier luxury cruise industry is doing, there is no stopping demand. The demand for budget airlines will rise to be close to 50% of the industry, and there will be less transit destinations, the supersonic jet will fly you direct. Rising fuel prices will make it cheaper to fly direct than to transit. I do not need to be a salesman to sell you anything, you presented the statistics, I will give you the projections, and it is based on your data.
– Contributed by Oogle.