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Oil Price

Flight disruptions in Europe a Foretaste for Period of Oil Decline

The shut down of European air traffic as a result of the ash cloud from Iceland’s volcano demonstrates how ill-prepared we are for the period of declining oil production ahead of us.


This map shows global air routes. From

The Frankfurt daily FAZ describes following impacts in an article entitled “Is there a way without flying?”

  • Ministers take night trains to meetings
  • People stay home
  • CEOs cancel conferences
  • Letters take longer
  • Supplies disrupted: tropical fruits; T shorts from China, Laos, Cambodia; computer chips from Taiwan, orchids from Thailand, fish from Japan, books ordered by internet
  • Hire car business is booming but geographical distribution of fleet is out of balance as cars are not returned to base as usual
  • Taxis at airports and air port shops have less business; 70,000 employees at Frankfurt Airport are affected
  • Tax revenue for city council is reduced – the airport is the 2nd most important source of tax after banks
  • Less visitors for trade fairs
  • No more short weekend trips to Mallorca

Positive impacts:

  • Video conferencing is now so advanced, even confidential talks can be done
  • Quiet approach corridors for residents and clearer skies

While a volcano eruption is “an act of God”, peak oil is not. There is enough statistical, financial and economic evidence – presented on this web site – that the global crude oil peak started in 2005. But governments are either still too blind to see it or are in denial mode.

There are other dangerous volcanos waiting for the airline industry:

“Key oil figures were distorted by US pressure, says whistleblower”


Crowded trains. Despite an extensive electrified rail system, Europe’s trains could not cope with additional demand from stranded air travellers.

The just-in-time air freight has also made our economy highly vulnerable to disruptions.

Factbox: Industry impact on day 6 of volcano disruption


Luxury carmaker BMW said it would stop production in its German plant in Dingolfing on Tuesday night, with Regensburg to following on Wednesday and Munich on Thursday due to lack of electronic components.


Distances driven by Norwegians have increased by 500 percent since the Icelandic volcano erupted, the Norwegian branch of car rental company Avis said.


A number of companies joined Cisco Systems said it was offering free trials of its phone and web conferencing systems and Polycom, a U.S. company offering conferencing services, said it had seen a jump in demand.


British-based supermarket group Tesco, the world’s No. 4 retailer, said it was arranging to pick up UK-bound Kenyan flowers from Spain, but it and other European retail giants Metro and Rewe of Germany stressed that only a tiny proportion of products traveled by air


Reed Elsevier’s flagship London Book Fair, which last year hosted 12,225 visitors and 1,567 exhibitors, was eerily quiet, with some events canceled and many speakers replaced.


British airports operator BAA, majority owned by Spain’s Ferrovial, estimates the daily impact from airport closures on adjusted EBITDA and cash flow at about 5 million pounds ($7.65 million).

We need to build in more redundancies into our logistics and move away from air dependent traffic in a systematic and planned way. There is very little time left to do this. The airline industry is now further weakened, reducing its chances to survive the next oil price shock expected by 2012.

What will happen to Brisbane – Sydney – Melbourne – Adelaide air traffic when there are jet fuel shortages or air lines go into receivership? Due to the distances involved flights can only be replaced by night trains. There are only 8 sleeper cars in the XPT fleet:


Here are the jet fuel “savings” during the peak of the disruptions:


That’s about 1.3 mb/d out of approximately 5 mb/d for global air traffic

That tells us what kind of dramatic events must happen to reduce oil demand as already highlighted here:

1st phase of peak oil caused demand destruction in OECD countries of around 5 mb/d

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