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Artemis Aerospace discusses the history of commercial flight and how global travel took off

Artemis Aerospace discusses the history of commercial flight and how global travel took off
PR Newswire
WISTON, England, Aug. 9, 2022

Flying has become the transport of choice for business travellers and holidaymakers across the globe and is now co…

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Artemis Aerospace discusses the history of commercial flight and how global travel took off

PR Newswire

Flying has become the transport of choice for business travellers and holidaymakers across the globe and is now considered one of the fastest, most convenient and safest forms of long-distance travel. But how did commercial flights go from being exclusively for the wealthy to the mainstream and affordable option it is today? Artemis Aerospace guides us through the different decades of air travel and how it has shaped modern-day living

WISTON, England, Aug. 9, 2022 /PRNewswire/ -- 

The first commercial flight

The first ever passenger flight took off in May 1908 when Wilbur Wright carried Charles Furnas just 2000 feet across the beach at Kitty Hawk in North Carolina. Just one year later, and the first airline in the world – German airship company DELAG – was founded.

In 1914, the world's first scheduled passenger service, an airboat piloted by Tony Jannus, set off from St Petersburg in Florida and landed at Tampa – around 17 miles away. The service only ran for four months, but it had unlocked the appetite of those keen to tap into the novelty of air transport.

A new era of aviation

However, it wasn't until the 1920s when commercial flights carrying paying passengers started to become commonplace with the introduction of the multi-engine aeroplane, the Lawson C-2, which was specifically built to carry passengers.

During this time, more and more start-up airline carriers were being established - some of which are still in operation today. These include KLM in the Netherlands (1919), Colombia's Avianca (1919), Qantas in Australia (1920) and Czech Airlines (1923).

Aircraft from this period would land frequently to refuel and fly at lower altitudes due to unpressurised cabins. This made travelling by plane noisy, cold and expensive. Flying times were lengthy and turbulence was frequent. Passengers regularly experienced air sickness and many airlines hired nurses to reduce anxiety and tend to those affected. 

In 1935, one of the world's oldest airlines, Qantas, operated its first international passenger flight, travelling from Brisbane to Singapore. From there, the British-owned Imperial Airways connected this flight to the UK. This was to set the wheels in motion for creating a regular travel route between Australia and the UK in the coming decades.

Despite flying being incredibly dangerous and extremely expensive during this period, it was still a fashionable way to travel for the rich. According to the Smithsonian National Air and Space Museum, the number of airline passengers grew from just 6,000 in 1930 to nearly half a million by 1934 - the aviation industry was well on its way to becoming hugely important to the global economy.

Innovation that revolutionised air travel

The introduction of the Douglas DC-3 in 1935 also had a big impact on the future of commercial flight. The propeller-driven airliner was a larger and much improved aircraft compared to its predecessors. Faster and more reliable, it could carry up to 32 passengers and had a cruising speed of 207mph with a range of 1500 miles. This made it popular with well-established airlines, including Delta, TWA, American and United, who soon added the aircraft to their fleets.

During the 1940s, the onset of WWII meant commercial aviation developments slowed considerably. However, by the end of the decade, the industry was heading towards a new era as Pan Am began operating its fleet of Boeing 307s, which featured the first ever pressurised cabin. This transformed air travel for passengers, allowing them to enjoy a comfortable experience at an altitude of 20,000 feet. Major airlines were now ramping up their advertising spend and offering travellers smooth journeys to far flung destinations and business hubs, including Pan Am's iconic New York to London route.

The Golden Age of Air Travel

The 1950s and 1960s heralded the age of the jet engine aircraft and with it came an upsurge in commercial flights, airline carriers and international flying routes.

Commercial air travel was booming, and major airlines were fiercely competitive, offering passengers more and more inflight perks, including lavish silver-service meals and fine wines.

The airline carrier Pan Am was a front runner in pioneering and marketing the very best air travel had to offer. It was the first airline to fly worldwide and introduced ground-breaking changes to the industry, such as adding jet aircraft to their fleets and utilising computerised reservation systems.

In the 1960s, work began on creating the world's first supersonic aircraft and what would eventually become an iconic symbol of commercial flight, the Concorde. Offering transatlantic flights in just 3.5 hours, the aircraft was a hit with business travellers and royalty alike. However, tickets were extremely expensive and only a privileged few could afford to travel via Concorde.

The rise of the no frills airline

Seeing a gap in the market for making air travel more accessible to everyday people, British-owned Laker Airways, which was founded in 1966 by Freddie Laker, was one of the first airlines to start offering a budget alternative by adjusting its inflight offer.

Using the budget airline business model that is commonplace today, Laker was able to offer lower price fares by reducing inflight services and luxuries, such as free meals. The airline also found innovative ways to reduce fuel consumption and engine wear by introducing the reduced thrust take-off technique and faster climbs to obtain the optimum flying altitude in as little time as possible. Sadly, the airline was a casualty of the 1980s' recession and subsequently went bankrupt. However, it had paved the way for budget travel and had opened a world of possibilities for millions more people to get the chance to travel by air.   

Today, the world's largest low-cost carrier is Southwest Airlines in the US. Synonymous with budget travel, the company's low-cost domestic and short haul offer has undoubtedly inspired many other well-known brands to tap into the no-frills market, including Ryanair and EasyJet.

Air travel for the masses

Larger and more economical aircraft, such as the Boeing 747, had also made cheaper air travel possible. Airlines were now able to carry more passengers than ever before, meaning ticket prices could be sold at a reduced rate. Holidaying abroad was no longer reserved for the rich.

This change in dynamics meant airlines now started to look for different ways to retain the luxurious service and long lunches that had been synonymous with the golden age of travel, without compromising on providing a budget alternative.

First-class cabins, sophisticated onboard bars and exclusive-use airport lounges meant those who could afford to, could still travel in style.

During the 1980s and 1990s, the budget airlines Ryanair and EasyJet launched. Offering airfares for as little as £20, they changed the face of commercial flying and put pressure on traditional carriers to lower ticket prices.

Security tightening in the 2000s

The tragic events of 9/11 had a profound effect on air travel. Security at airports was increased significantly and passengers without a ticket at US airports could no longer accompany friends and family through security to the gate.

Cockpit security also heightened. Previously, it had been possible for passengers to visit the flight deck and speak to the pilots. However, after 2001, cockpit doors were locked with only the pilots controlling who could enter.

A new era for air travel

According to the Bureau of Transportation Statistics, it took until 2004 for air passenger numbers to reach pre-9/11 levels and until 2007 to reach a record high.

During this period, low-cost carriers were experiencing increased demand as the popularity of booking websites surged and, by 2009, figures from the tourism research company PhoCusWright reported that half of all travel-related bookings were being made online.

Passenger numbers continued to surge throughout the 2010s and by the end of the decade the volume of travellers using commercial airlines was at an all-time high.

The post-pandemic era – flying into a new age for aviation

Prior to the pandemic, the International Air Transport Association predicted that the number of airline passengers could reach 7.2 billion by 2035. However, nobody in the industry could prepare for the global aircraft groundings and unpredictable travel restrictions caused by COVID-19.

Despite this, the industry is full of optimism. As we enter a new era for aviation, and reflect on the past, we can be confident that no matter what obstacles we encounter, air travel will prevail.

www.artemisaerospace.com

Sources

https://www.smithsonianmag.com/air-space-magazine/above-beyond-180962399/ 
https://en.wikipedia.org/wiki/Airline#:~:text=History- 
https://www.burnsmcd.com/insightsnews/publications/aviation-special-report/2011/timeline-of-commercial-aviation
https://www.loveexploring.com/gallerylist/86315/how-air-travel-has-changed-in-every-decade-from-the-1920s-to-today 
https://www.century-of-flight.net/commercial-aviation-industry-1920-1930/  
https://metroairportnews.com/travel-by-air-the-golden-years-1920s-1960s/ 
https://en.wikipedia.org/wiki/Douglas_DC-3 
https://en.wikipedia.org/wiki/Pan_Am 

Artemis Aerospace offers an innovative approach to component solutions for the aviation sector. Established in 1999, the company has earned a reputation for outstanding customer service by solving problems and providing a range of realistic options that offer customers the flexibility and freedom to choose a solution that suits their timescale and budget. Its services include component supplies, component repairs, lessor support, flight simulation hardware support, consignment stock management and global aircraft logistics.

With decades of expertise in global aviation logistics, the expert team works with trusted MROs, OEMs, and aftermarket suppliers around the world to offer 24/7 support to its global customer base.

www.artemisaerospace.com

Photo: https://mma.prnewswire.com/media/1875121/Artemis_Aerospace_history.jpg

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Economics

Nearly Half Of Americans Making Six-Figures Living Paycheck To Paycheck

Nearly Half Of Americans Making Six-Figures Living Paycheck To Paycheck

Roughly 60% of Americans say they’re living paycheck to paycheck -…

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Nearly Half Of Americans Making Six-Figures Living Paycheck To Paycheck

Roughly 60% of Americans say they're living paycheck to paycheck - a figure which hasn't budged much overall from last year's 55% despite inflation hitting 40-year highs, according to a recent LendingClub report.

Even people earning six figures are feeling the strain, with 45% reporting living paycheck to paycheck vs. 38% last year, CNBC reports.

"More consumers living paycheck to paycheck indicates that many are continuing to lose their financial stability," said LendingClub financial health officer, Anuj Nayar.

The consumer price index, which measures the average change in prices for consumer goods and services, rose a higher-than-expected 8.3% in August, driven by increases in food, shelter and medical care costs.

Although real average hourly earnings also rose a seasonally adjusted 0.2% for the month, they remained down 2.8% from a year ago, which means those paychecks don’t stretch as far as they used to. -CNBC

Meanwhile, Bank of America found that 71% of workers say their income isn't keeping pace with inflation - resulting in a five-year low in terms of financial security.

"It is no secret that prices have been increasing for everyday Americans — not only in the goods and services they purchase but also in the interest rates they’re paying to fund their lives," said Nayar, who noted that people are relying more on credit cards and carry a higher monthly balance, making them financially vulnerable. "This can have detrimental consequences for someone who pays the minimum amount on their credit cards every month."

According to an Aug. 30 report from the Federal Reserve Bank of New York, credit card balances increased by $46 billion from last year, becoming the second-biggest source of overall debt last quarter.

And as Bloomberg noted last month, more US consumers are saddled with credit card debt for longer periods of time. According to a recent survey by CreditCards.com, 60% of credit card debtors have been holding this type of debt for at least a year, up 50% from a year ago, while those holding debt for over two years is up 40%, from 32%, according to the online credit card marketplace.

And while total credit-card balances remain slightly lower than pre-pandemic levels, inflation and rising interest rates are taking a toll on the already-stretched finances of US households.

About a quarter of respondents said day-to-day expenses are the primary reason why they carry a balance. Almost half cite an emergency or unexpected expense, including medical bills and home or car repair.

The Federal Reserve is likely to raise interest rates for the fifth time this year next week. Credit-card rates are typically directly tied to the Fed Funds rate, and their increase along with a softening economy may lead to higher delinquencies. 

Total consumer debt rose $23.8 billion in July to a record $4.64 trillion, according to data from the Federal Reserve. -Bloomberg

The Fed's figures include credit card and auto debt, as well as student loans, but does not factor in mortgage debt.

Tyler Durden Tue, 10/04/2022 - 20:25

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Spread & Containment

Plunging pound and crumbling confidence: How the new UK government stumbled into a political and financial crisis of its own making

Liz Truss took over as prime minister with an ambitious plan to cut taxes by the most since 1972 – investors balked after it wasn’t clear how she would…

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The hard hats likely came in handy recently for Prime Minister Liz Truss and Chancellor of the Exchequer Kwasi Kwarteng. Stefan Rousseau/Pool Photo via AP

The new British government is off to a very rocky start – after stumbling through an economic and financial crisis of its own making.

Just a few weeks into its term on Sept. 23, 2022, Prime Minister Liz Truss’ government released a so-called mini-budget that proposed £161 billion – about US$184 billion at today’s rate – in new spending and the biggest tax cuts in half a century, with the benefits mainly going to Britain’s top earners. The aim was to jump-start growth in an economy on the verge of recession, but the government didn’t indicate how it would pay for it – or provide evidence that the spending and tax cuts would actually work.

Financial markets reacted badly, prompting interest rates to soar and the pound to plunge to the lowest level against the dollar since 1985. The Bank of England was forced to gobble up government bonds to avoid a financial crisis.

After days of defending the plan, the government did a U-turn of sorts on Oct. 3 by scrapping the most controversial component of the budget – elimination of its top 45% tax rate on high earners. This calmed markets, leading to a rally in the pound and government bonds.

As a finance professor who tracks markets closely, I believe at the heart of this mini-crisis over the mini-budget was a lack of confidence – and now a lack of credibility.

A looming recession

Truss’ government inherited a troubled economy.

Growth has been sluggish, with the latest quarterly figure at 0.2%. The Bank of England predicts the U.K. will soon enter a recession that could last until 2024. The latest data on U.K. manufacturing shows the sector is contracting.

Consumer confidence is at its lowest level ever as soaring inflation – currently at an annualized pace of 9.9% – drives up the cost of living, especially for food and fuel. At the same time, real, inflation-adjusted wages are falling by a record amount, or around 3%.

It’s important to note that many countries in the world, including the U.S. and in mainland Europe, are experiencing the same problems of low growth and high inflation. But rumblings in the background in the U.K. are also other weaknesses.

Since the financial crisis of 2008, the U.K. has suffered from lower productivity compared with other major economies. Business investment plateaued after Brexit in 2016 – when a slim majority of voters chose to leave the European Union – and remains significantly below pre-COVID-19 levels. And the U.K. also consistently runs a balance of payments deficit, which means the country imports a lot more goods and services than it exports, with a trade deficit of over 5% of gross domestic product.

In other words, investors were already predisposed to view the long-term trajectory of the U.K. economy and the British pound in a negative light.

An ambitious agenda

Truss, who became prime minister on Sept. 6, 2022, also didn’t have a strong start politically.

The government of Boris Johnson lost the confidence of his party and the electorate after a series of scandals, including accusations he mishandled sexual abuse allegations and revelations about parties being held in government offices while the country was in lockdown.

Truss was not the preferred candidate of lawmakers in her own Conservative Party, who had the task of submitting two choices for the wider party membership to vote on. The rest of the party – dues-paying members of the general public – chose Truss. The lack of support from Conservative members of Parliament meant she wasn’t in a position of strength coming into the job.

Nonetheless, the new cabinet had an ambitious agenda of cutting taxes and deregulating energy and business.

Some of the decisions, laid out in the mini-budget, were expected, such as subsidies limiting higher energy prices, reversing an increase in social security taxes and a planned increase in the corporate tax rate.

But others, notably a plan to abolish the 45% tax rate on incomes over £150,000, were not anticipated by markets. Since there were no explicit spending cuts cited, funding for the £161 billion package was expected to come from selling more debt. There was also the threat that this would be paid for, in part, by lower welfare payments at a time when poorer Britons are suffering from the soaring cost of living. The fear of welfare cuts is putting more pressure on the Truss government.

a man in a brown stocking hat inspects souvenirs near a bunch of UK flags and other trinkets
The cost of living crisis in the U.K. has everyone looking for deals where they can. AP Photo/Kirsty Wigglesworth

A collapse in confidence

Even as the new U.K. Chancellor of the Exchequer Kwasi Kwarteng was presenting the mini-budget on Sept. 23, the British pound was already getting hammered. It sank from $1.13 the day before the proposal to as low as $1.03 in intraday trading on Sept. 26. Yields on 10-year government bonds, known as gilts, jumped from about 3.5% to 4.5% – the highest level since 2008 – in the same period.

The jump in rates prompted mortgage lenders to suspend deals with new customers, eventually offering them again at significantly higher borrowing costs. There were fears that this would lead to a crash in the housing market.

In addition, the drop in gilt prices led to a crisis in pension funds, putting them at risk of insolvency.

Many members of Truss’ party voiced opposition to the high levels of borrowing likely necessary to finance the tax cuts and spending and said they would vote against the package.

The International Monetary Fund, which bailed out the U.K. in 1976, even offered its figurative two cents on the tax cuts, urging the government to “reevaluate” the plan. The comments further spooked investors.

To prevent a broader crisis in financial markets, the Bank of England stepped in and pledged to purchase up to £65 billion in government bonds.

Besides causing investors to lose faith, the crisis also severely dented the public’s confidence in the U.K. government. The latest polls showed the opposition Labour Party enjoying a 24-point lead, on average, over the Conservatives.

So the government likely had little choice but to reverse course and drop the most controversial part of the plan, the abolition of the 45% tax rate. The pound recovered its losses. The recovery in gilts was more modest, with bonds still trading at elevated levels.

Putting this all together, less than a month into the job, Truss has lost confidence – and credibility – with international investors, voters and her own party. And all this over a “mini-budget” – the full budget isn’t due until November 2022. It suggests the U.K.‘s troubles are far from over, a view echoed by credit rating agencies.

David McMillan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

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Economics

Roubini: The Stagflationary Debt Crisis Is Here

Roubini: The Stagflationary Debt Crisis Is Here

Authored by Nouriel Roubini via Project Syndicate,

The Great Moderation has given way to…

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Roubini: The Stagflationary Debt Crisis Is Here

Authored by Nouriel Roubini via Project Syndicate,

The Great Moderation has given way to the Great Stagflation, which will be characterized by instability and a confluence of slow-motion negative supply shocks. US and global equities are already back in a bear market, and the scale of the crisis that awaits has not even been fully priced in yet.

For a year now, I have argued that the increase in inflation would be persistent, that its causes include not only bad policies but also negative supply shocks, and that central banks’ attempt to fight it would cause a hard economic landing. When the recession comes, I warned, it will be severe and protracted, with widespread financial distress and debt crises. Notwithstanding their hawkish talk, central bankers, caught in a debt trap, may still wimp out and settle for above-target inflation. Any portfolio of risky equities and less risky fixed-income bonds will lose money on the bonds, owing to higher inflation and inflation expectations.

How do these predictions stack up? First, Team Transitory clearly lost to Team Persistent in the inflation debate. On top of excessively loose monetary, fiscal, and credit policies, negative supply shocks caused price growth to surge. COVID-19 lockdowns led to supply bottlenecks, including for labor. China’s “zero-COVID” policy created even more problems for global supply chains. Russia’s invasion of Ukraine sent shockwaves through energy and other commodity markets. And the broader sanctions regime – not least the weaponization of the US dollar and other currencies – has further balkanized the global economy, with “friend-shoring” and trade and immigration restrictions accelerating the trend toward deglobalization.

Everyone now recognizes that these persistent negative supply shocks have contributed to inflation, and the European Central Bank, the Bank of England, and the US Federal Reserve have begun to acknowledge that a soft landing will be exceedingly difficult to pull off. Fed Chair Jerome Powell now speaks of a “softish landing” with at least “some pain.” Meanwhile, a hard-landing scenario is becoming the consensus among market analysts, economists, and investors.

It is much harder to achieve a soft landing under conditions of stagflationary negative supply shocks than it is when the economy is overheating because of excessive demand. Since World War II, there has never been a case where the Fed achieved a soft landing with inflation above 5% (it is currently above 8%) and unemployment below 5% (it is currently 3.7%). And if a hard landing is the baseline for the United States, it is even more likely in Europe, owing to the Russian energy shock, China’s slowdown, and the ECB falling even further behind the curve relative to the Fed.

Are we already in a recession? Not yet, but the US did report negative growth in the first half of the year, and most forward-looking indicators of economic activity in advanced economies point to a sharp slowdown that will grow even worse with monetary-policy tightening. A hard landing by year’s end should be regarded as the baseline scenario.

While many other analysts now agree, they seem to think that the coming recession will be short and shallow, whereas I have cautioned against such relative optimism, stressing the risk of a severe and protracted stagflationary debt crisis. And now, the latest distress in financial markets – including bond and credit markets – has reinforced my view that central banks’ efforts to bring inflation back down to target will cause both an economic and a financial crash.

I have also long argued that central banks, regardless of their tough talk, will feel immense pressure to reverse their tightening once the scenario of a hard economic landing and a financial crash materializes. Early signs of wimping out are already discernible in the United Kingdom. Faced with the market reaction to the new government’s reckless fiscal stimulus, the BOE has launched an emergency quantitative-easing (QE) program to buy up government bonds (the yields on which have spiked).

Monetary policy is increasingly subject to fiscal capture. Recall that a similar turnaround occurred in the first quarter of 2019, when the Fed stopped its quantitative-tightening (QT) program and started pursuing a mix of backdoor QE and policy-rate cuts – after previously signaling continued rate hikes and QT – at the first sign of mild financial pressures and a growth slowdown. Central banks will talk tough; but there is good reason to doubt their willingness to do “whatever it takes” to return inflation to its target rate in a world of excessive debt with risks of an economic and financial crash.

Moreover, there are early signs that the Great Moderation has given way to the Great Stagflation, which will be characterized by instability and a confluence of slow-motion negative supply shocks. In addition to the disruptions mentioned above, these shocks could include societal aging in many key economies (a problem made worse by immigration restrictions); Sino-American decoupling; a “geopolitical depression” and breakdown of multilateralism; new variants of COVID-19 and new outbreaks, such as monkeypox; the increasingly damaging consequences of climate change; cyberwarfare; and fiscal policies to boost wages and workers’ power.

Where does that leave the traditional 60/40 portfolio? I previously argued that the negative correlation between bond and equity prices would break down as inflation rises, and indeed it has. Between January and June of this year, US (and global) equity indices fell by over 20% while long-term bond yields rose from 1.5% to 3.5%, leading to massive losses on both equities and bonds (positive price correlation).

Moreover, bond yields fell during the market rally between July and mid-August (which I correctly predicted would be a dead-cat bounce), thus maintaining the positive price correlation; and since mid-August, equities have continued their sharp fall while bond yields have gone much higher. As higher inflation has led to tighter monetary policy, a balanced bear market for both equities and bonds has emerged.

But US and global equities have not yet fully priced in even a mild and short hard landing. Equities will fall by about 30% in a mild recession, and by 40% or more in the severe stagflationary debt crisis that I have predicted for the global economy. Signs of strain in debt markets are mounting: sovereign spreads and long-term bond rates are rising, and high-yield spreads are increasing sharply; leveraged-loan and collateralized-loan-obligation markets are shutting down; highly indebted firms, shadow banks, households, governments, and countries are entering debt distress.

The crisis is here.

Tyler Durden Tue, 10/04/2022 - 17:25

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