Airline profits hit by high oil prices, rise in fares possible

High oil prices cost us at the pump, play into the prices of most consumer goods and will cut 2011 airline profits in half in spite of the recent growth in air travel says a new forecast out today.

In a revised profit forecast, International Air Transport Association said it was downgrading its airline industry profit outlook for 2011 to $8.6 billion from the $9.1 billion it had estimated just last December.

“This is a 46 percent fall in net profits compared to the US$16 billion earned by the industry in 2010,” IATA said in a statement.

The new forecasts were based on oil priced at a average of $96 per barrel of Brent crude over the year, compared to $84 a barrel used in the December forecast. The price of oil spiked to $115 today, shy of last weeks high of $120.In February, responding to unrest in Egypt, American Airlines added fuel surcharges of as much as $5 each way on many routes with United Continental Holdings Inc. adding a $3 each-way surcharge. At the time, British Airways said they would increase the fuel surcharge they already have in place.

Now, with this latest announcement signaling an approaching hit on profits, airline shareholders are already in pain. The 2008 spike in oil prices sent airlines into a 2-year profit tailspin.

Flickr photo by L.C.Nottaasen

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Travel then and now: Travel to the USSR and GDR

This year is the 20th anniversary of the fall of the Soviet Union and 21 years since the reunification of Germany. While citizens of the USSR and GDR were unable to travel abroad and restricted in domestic travel, foreign travelers were permitted under a controlled environment. In the early nineties, if you were a foreigner looking to go abroad to the Eastern Europe or Central Asia, you called your travel agent and hoped to get approved for a visa and an escorted tour. After your trip, you’d brag about the passport stamps and complain about the food. Here’s a look back at travel as it was for foreigners twenty years ago and today visiting the biggies of the former Eastern Bloc: the United Socialist Soviet Republic (USSR) and the German Democratic Republic (East Germany).

Soviet Union/USSR (now: independent states of Armenia, Azerbaijan, Belarus, Estonia, Georgia, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldovia, Russia, Tajikistan, Turkmenistan, Ukraine, and Uzbekistan.)

Travel then: Before 1992, most tourists were only able to enter the Soviet Union with visas and travel itineraries provided by the state travel agency, Intourist. Intourist was founded by Joseph Stalin and also managed many of the USSR’s accommodations. Like North Korea today, visitors’ experiences were tightly controlled, peppered with propaganda, and anything but independent, with some travelers’ conversations and actions recorded and reported. Read this fascinating trip report from a Fodor’s community member who visited Russia in 1984 and a Chicago Tribune story with an Intourist guide after the glasnost policy was introduced.Travel now: UK travel agency Thomas Cook bought a majority stake in Intourist last year, gaining control of their tourist agencies, and many of the old Intourist hotels can still be booked, though standards may not be a huge improvement over the Soviet era. In general, the former Soviet Union now welcomes foreign and independant visitors with open arms. Even Stalinist Turkmenistan is softer on foreigners since the death of dictator Saparmurat Niyazov in 2006. Russia now receives as many visitors as the United Kingdom, the Baltic and Eastern European states are growing in popularity for nightlife and culture, and Central Asian states have a lot to offer adventurous travelers (including Azerbaijan’s contender for New 7 Wonders, the Mud Volcanoes). This year, Estonia’s Tallinn is one of the European Capitals of Culture. While a few FSU countries are now EU members, several still require advance visas, letters of invitation, or even guides; check the latest rules for Azerbaijan, Belarus, Russia, Turkmenistan, and Uzbekistan before you make plans.

German Democratic Republic/East Germany/DDR (now: unified state of Germany)

Travel then: After 40 years apart, East and West Germany were reunited in 1990. Like the USSR, travelers to the GDR had to deal with visas and an official state travel agency, the Reisebüro. Western tourists in West Germany could apply for day visas to “tour” the Eastern side but were very limited in gifts they could bring or aid they could provide (tipping was considered bourgeois and thus officially discouraged). Read this Spiegel article about the East German adventure travelers who snuck into the USSR to see how travel to inaccessable is often the most exciting, no matter where you are coming from.

Travel now: November 2009 marked the 20 year anniversary of the fall of the Berlin Wall and Berlin is now consistently lauded as one of the world’s hippest and most vibrant cities. The city is full of museums, monuments, and memorials to document the time East Germany was walled off from the rest of the world, from the sobering Berlin Wall Memorial to the tongue-in-cheek DDR Hotel. Outside of Berlin, Leipzig’s Stasi Museum documents the gadgets and horrors of the Stasi, the GDR’s secret police. For more on life in the GDR, Michael Mirolla’s novel Berlin deals with cross-border Germany travel and the fall of the republic, and film Goodbye Lenin! is a bittersweet look at life just before and after the fall of the wall.

Gadling readers: have you traveled to the USSR or GDR? Have you been recently? Leave us your comments and experiences below.

[Photo credit: USSR flags and GDR ferry postcards from Flickr user sludgeulper, Berlin Wall by Meg Nesterov]

The aerogramme and the email

Once upon a time, the cheapest, most convenient way for travelers abroad to write to friends and family back home was the aerogramme. This ingenious creation was a razor-thin, super-light, roughly 6-x-11-inch sheet of blue-colored paper that was designed to be folded into thirds, creating six postcard-size panels (both sides of the paper were used).

One of these panels was pre-stamped and printed with dotted lines for the recipient’s address; four of the panels were blank, to be used for writing your message; and in the Greek aerogramme that lies before me now, the other panel features a photo of whitewashed buildings rising up a rocky brown hill against a deep blue sky.

Adjoining the stamp-and-address panel were two gummed flaps; when you finished your message, you licked and folded these flaps to seal the note. Then all you had to do was drop the aerogramme into a mailbox. No weighing, no paying, no standing in line. This was the height of epistolary convenience when I lived in France, Greece, and Japan in the 1970s.

The challenge, of course, was how much information you could squeeze into those four blank panels – how precisely and minutely could you write and still be legible? On that Greek ‘gramme to my parents, I managed 60 lines of about 11 words each, enough to cover the highlights of a spring swing through Egypt (riding Arabian stallions four hours into the desert, climbing the Great Pyramid, touring the temples and tombs of Luxor), a quick outline of plans for my just-starting summer trip (staying with friends in Nairobi and exploring Kenya on day-trips, climbing Kilimanjaro and going on safari in Tanzania with the family of two of my Greek students, then returning to the States via Santorini and Paris), plus the obligatory update on my financial situation.

Writing home is a whole lot easier in 2011. The digital equivalent of the aerogramme isn’t confined to six panels, and doesn’t take weeks to reach its intended recipient. You can write as much as you like, and send it to as many people as you like, and it arrives instantaneously! And still no weighing, paying, or waiting in line (unless you count the occasional wait for an open terminal at an Internet cafe). Though the Internet hasn’t reached every crack and crevice of the planet, I think it’s safe to say that there are vastly more digital post offices now than there were stone-and-stucco ones back in the day. And what about that evocative photo of those whitewashed hillside homes? Now you can attach your own.

Luckily, my parents kept big rubber-banded bundles of my aerogrammes so that I can peruse them now, but with emails, you don’t have to rely on anyone; you can store them yourself. And instead of having to paw through bundles of letters when you’re looking for a specific passage 35 years later, you can effortlessly search your archives to locate that stallion’s-eye view of sunset in the Sahara. So convenient!

Is there any downside to this technological evolution? Well, maybe just this one. There’s a kind of palpable poignancy to that Greek aerogramme. I hold it in my hands, trace the rough letters and creases in the page, smell its musty perfume – and it’s a pale blue magic carpet that whisks me back to the moment in the Athens airport when I sat at a small table, with a demitasse of Greek coffee, scribbling. I taste the thick, bitter coffee, the sludgy residue on my lips, feel the dry dusty heat, the anticipation in my fingertips….

Will my emails transport me that same way when I read them three and a half decades from today?

Video of the Day – Learning Chinese in Beijing

Do you remember the first moment you arrived in a new city? If you are anything like me, everything about a new place seems strangely fascinating, from the unfamiliar smells and sounds to the new customs you discovered and captivating language. Today’s video, which follows the journey of a student as he begins to learn Chinese in Beijing, feels a lot like that first moment. This beautifully produced video is actually part of a series produced by a language company called Education First. So yes, it is an ad for their language courses – but the spirit of joy and discovery in the video feels very true to travel form.

[Via Core77]

[Thanks Jon!]

Photo of the Day: Boys riding water buffaloes in Vietnam

I kind of want to ride a water buffalo. Do you think it’s like riding an elephant? (I haven’t done that, either, so I guess it doesn’t matter.) These two boys look quite at home on top of these creatures, and they’re bareback, yet!

Besides the subject matter, I like the colors in this photo – the vivid green against the gray skies and animals. I wonder what is growing in the background.

Thanks to Flickr user t3mujin for sharing this photo with us in Gadling’s Flickr pool.

Have any cool photos from your travels that you’d like to share with the world? Upload them to our Flickr pool, and we just might choose one for our Photo of the Day feature.