The Impact of Reality

So, again, we highly recommend getting those Skymiles, Worldperks, and other airline points used up soon. Why?

Well, check out this article from the Orlando Sentinel tourism blog:

A once-optimistic trade group for the world's airlines is now projecting deep losses for the industry because of unprecedented fuel-price increases.

The International Air Transport Association said this morning it thinks global airlines will lose a combined $2.3 billion in 2008. In doing so, it lopped a whopping $6.8 billion off of its initial projection of $4.5 billion in industry-wide profits for the year.

“The situation has changed dramatically in recent weeks. Oil skyrocketing above US$130 per barrel has brought us into uncharted territory. Add in the weakening global economy and this is yet another perfect storm,” Giovanni Bisignani, IATA Director General and CEO, said in a written statement.

Okay, this is almost surreal. Allow me to quote the key sentence again:

In doing so, it lopped a whopping $6.8 billion off of its initial projection of $4.5 billion in industry-wide profits for the year.

How in the world does someone wake up one day and realize "Oops, we missed our projection by nearly 7 billion in the red".

The answer is simple: combine a little Pollyannism with a crisis that isn't easily defined by precedence. What you get is a massive readjustment--like this one.