No one sees it coming more clearly than the blogger with the nom de plume of Jerome a Paris. Jerome does not say so directly, but if what Jerome says is true, the hand writing is on the wall for air travel. Jerome is writing the same story on the European Tribune, Daily Kos, and The Oil Drum, $200 a barrel oil is coming. I believe that he is right. No gas tax holiday is going to stop it, in fact a gas tax holiday is a political stunt that will only hasten the day when $200 a barrel oil is upon us. The problem is simple. Chinese oil use is increasing by 5% to 10% a year, Car sales in India are up 17% over last year, and the production of Middle Eastern oil is either about to peak, or has actually peaked already. The result is a squeeze between the increasing demand for oil, and the stagnant or decreasing oil supply.
The consequence of this squeeze is an ever increasing demand for oil until demand can no longer be sustained. Jerome a Paris's chart at left illustrates how the dramatic rise in the price of oil during this decade. A Paris argues that it is only a matter of time before oil hits $200 a barrel, and indeed $200 a barrel oil seems inevitable.
"But," you ask, "how is this going to kill air travel?"
The answer is simple. The airlines have to pay for jet fuel, and what they pay is directly tied to the cost of oil. Now one of two things is going to happen as the price of jet fuel goes up. Either the airlines raise ticket prices to cover the cost of get fuel, or they subtract the fuel price increase from their bottom line. Either way the air industry looses. Air travel will drop as air ticket prices increase. If an airline does not increase ticket prices to cover the cost of fuel oil, it will eventually loose money, and go bankrupt. But if air travel drops to much, eventually the airlines' fixed expenses will catch up with them, and the airlines will be forced into bankruptcy.
Eventually the increasing cost of oil will enforce changes on the way we travel, do business, and one our way of live. It should be noted that rail transportation is far more energy efficient than air travel. High speed electrical trains can move passengers from city to city almost as quickly or even more quickly than jet aircraft can. Of course a good deal of money would have to go into upgrading the rail system, in order to carry 200 MPH+ trains. But there would be money to make too as passengers increasingly shifted from air travel, to high speed passenger trains.
The future of the air industry looks dismal. Hopes would include bio-fuels which are beginning to encounter increasing environmental, humanitarian and economical objections. Another hope would involve some form of hydrogen. Don't bother to think about it. For multiple reasons, hydrogen is not going to save the airline industry.
Is air travel then going to be a thing of the past - a phenomena of the 20th century? It is beginning to look that way.