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Old June 9th, 2008, 05:28 PM
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Default Cruising, Stagflation and the Mess Developing in Europe

Time reports tens of thousands of Spanish truckers began an indefinite strike over soaring fuel costs that could bring the country to a standstill. This could really nail anyone who has to breeze through Spain to a port and if strikes spread to other industries and to other countries we could see folks getting stranded during European travel.

Add to this the fact that many smaller, connecting flight airlines may not make it this fall....

Call me an auditor, but I detect some elevated risk now in overseas travel.

Comments?
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Old June 10th, 2008, 12:17 AM
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I agree that anything is possible. France is especially prone to transportation strikes, and England is also. Barcelona is a major cruise port.

I have heard the Europeans are not flocking to cruise ships this year like they did last year - perhaps the added costs (fuel surcharge, etc) makes the US-based cruise lines not the bargains they once were?

Or maybe the European economy is getting almost as depressing as ours is?
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Old June 10th, 2008, 12:31 AM
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Default Re: Cruising, Stagflation and the Mess Developing in Europe

Quote:
Originally Posted by Divemaster
Time reports tens of thousands of Spanish truckers began an indefinite strike over soaring fuel costs that could bring the country to a standstill. This could really nail anyone who has to breeze through Spain to a port and if strikes spread to other industries and to other countries we could see folks getting stranded during European travel.

Add to this the fact that many smaller, connecting flight airlines may not make it this fall....

Call me an auditor, but I detect some elevated risk now in overseas travel.

Comments?
Having returned from Europe a few weeks ago I see a number of issues that are similar to issues we are having here in the U.S. plus a couple more. They too are suffering through high fuel costs that are adding to the costs of goods and contributing to inflation. Their current inflation rates in EU countries is around 3.5 to 4%. Prices reflect this plus the added taxation make goods more expensive than in the U.S.

The "cheap" inter-Europe flights that Europeans were used are also going to be more expensive. They already are. $99 Frankfurt to Rome flights were quite common now they are more than double.

For cruisers, add the poor exchange rate of the dollar ($1.54/1 euro) and Europe is not a great destination for "shopping" or excursions. Tours are more expensive now than in previous years, even if you pay in dollars. If you do some self walking tours and keep your purchasing down a cruise is the best way to "see" Europe without going broke.

The high value of the Euro against the dollar is actually having a negative impact for the EU because this means less European goods are being purchased by the U.S.. This is contributing to their inflation and lowering their GDP. Not good.

In regard to the truckers strike, the same thing may be right around the corner here in the U.S.. It has already happened on smaller scales around the U.S.. My brother is a V.P. for a large trucking company and they are in a world of hurt. They have cut back on the size of their fleet and have raised their rates almost 40% because of high fuel costs. Small trucking companies are either going out of business or are being gobbled up by larger companies for a song. They can't afford the fuel, maintenance and insurance costs to run their fleet. At almost $5.00 for diesel it is almost impossible for an "independent trucker" to make a living. The only alternative is to raise prices so high that it will be passed on to the consumer and we will end up with inflation on the consumer product level. Many inflation statistics remove "fuel" from the equation.

I also see that cruise lines will are also facing problems and challenges that are equal to what they faced after 9/11. With the added cost of fuel, rising air fares and inflation costs they will need to keep competitive with other vacation alternatives plus pull in customers to fill the large fleets they have compiled and still make a profit. It will be a challenge.

Take care,
Mike
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Old June 10th, 2008, 02:16 PM
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when you think about a "world of hurt" in a doomsday NO OIL scenario the cruise lines would be really in trouble.

What if oil somehow suddenly become outrageously expensive? Air carriers couldn't lift passengers to ships, and ships would all have to sail out of US ports, cutting their itineraries to near islands because they can't burn too much fuel.

Scary.

The Queen Mary 2 - a beautiful ship, has massive engines and specializes at crossing the Atlantic averaging 29 knots. That's a lot of fuel.
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Old June 10th, 2008, 02:59 PM
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The Queen Mary II - the next United States?

BTW good PBS show on what became of America's flagship.

Quote:
Originally Posted by Paul Motter
when you think about a "world of hurt" in a doomsday NO OIL scenario the cruise lines would be really in trouble.

What if oil somehow suddenly become outrageously expensive? Air carriers couldn't lift passengers to ships, and ships would all have to sail out of US ports, cutting their itineraries to near islands because they can't burn too much fuel.

Scary.

The Queen Mary 2 - a beautiful ship, has massive engines and specializes at crossing the Atlantic averaging 29 knots. That's a lot of fuel.
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Old June 11th, 2008, 12:55 AM
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I do see that the cruise lines are once again increasing their Homeland Cruising programs that they started after 9/11 and scaled back in 2003. With Carnival expanding to Baltimore, Charleston and Jacksonville and other cruise lines will probably follow suit. I don't think the cruise lines can rely on condo commandos to fill the ships if air fares become too high to make cruises too expensive for folks outside the main port areas.

This, in my opinion, is a very good thing. It may limit the number of islands they visit but it does open up cruising to some folks who would never cruise.

Then again, if it was such a good thing why did they stop it so soon in 2003?

Take care,
Mike
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