Moderators: richierich, ua900, PanAm_DC10, hOMSaR
lightsaber wrote:Kilopond, you beat me too it!
Link for others to iATA jet fuel monitor.
http://www.iata.org/publications/econom ... index.aspx
Perspective:
Fuel is now $89.30/bbl
Fuel was $120 to $140/bbl for years.
Solutions?
1. Allegiant retiring MD-80s, replacing with fewer A320 & A319 with slightly more seats. Yeah, rather than do a laundry list, replace gas hogs!
2. Hedge.
3. Cut marginal routes
4. Upgauge RJs
5. Cut ULH (oh wait, ME3 are cutting...)
Record profits for US airlines will go to fuel.
We're in a synced global economic expansion. That means higher gasoline, jet fuel, and other commodity prices. Supply and demand means prices must go up to increase production.
Or buy a NEO or MAX and cut fuel 15% to 20%. This price increase will result in earlier retirement of heavy fuel burning. Moderate fuel burning will go to lower utilization.
This is good news for the A350, 787, NEO, MAX, C-series, MRJ, E2-jets, and 777X. It is bad news for everything else.
Lightsaber
iad51fl wrote:The airlines can start using that "baggage fee" and "fuel surcharge" money they have been collecting over the last 3-4 years to pay the difference.
Flybird wrote:Fuel prices surged to multi-year highs in the domestic market, dragging the profits of airline companies
https://news.alphastreet.com/airline-co ... skyrocket/
The potential damage to the sector from the rising fuel prices can be gauged from the downbeat outlook announced by American Airlines (AA), which owns the largest aircraft fleet in the world, projecting a staggering $2 billion increase in costs this year due to high gasoline prices!
JetBlue forecasted a decline in RASM for the coming quarter.?
Meanwhile, United Airlines managed to override the impact of a 26% increase in fuel costs in the first quarter and registered higher earnings.
lightsaber wrote:Kilopond, you beat me too it!
Link for others to iATA jet fuel monitor.
http://www.iata.org/publications/econom ... index.aspx
Perspective:
Fuel is now $89.30/bbl
Fuel was $120 to $140/bbl for years.
Solutions?
2. Hedge.
Record profits for US airlines will go to fuel.
We're in a synced global economic expansion. That means higher gasoline, jet fuel, and other commodity prices. Supply and demand means prices must go up to increase production.
Or buy a NEO or MAX and cut fuel 15% to 20%. This price increase will result in earlier retirement of heavy fuel burning. Moderate fuel burning will go to lower utilization.
This is good news for the A350, 787, NEO, MAX, C-series, MRJ, E2-jets, and 777X. It is bad news for everything else.
Lightsaber
JackMeahoff wrote:There are a lot of wells in North Dakota, Texas and the Gulf of Mexico that have been shut off for the last few years. Once oil breaches $80 or $100 per barrel they will be turning them on, sending prices back downward. I know a guy in Texas and half of his small wells are capped for the time being.
lightsaber wrote:Record profits for US airlines will go to fuel.
andrew50 wrote:Remember the baggage fees were imposed because of oil being $100 a barrel! The fares were high when oil was at $50 plus ripping people off on all the extra charges, baggage fees, and the biggest ripoff of any business I can think of the $200 change fee. They are making millions on all those fees. I have a hard to listening to the airlines whining again about fuel prices!
lightsaber wrote:Kilopond, you beat me too it!
Link for others to iATA jet fuel monitor.
http://www.iata.org/publications/econom ... index.aspx
Perspective:
Fuel is now $89.30/bbl
Fuel was $120 to $140/bbl for years.
Solutions?
1. Allegiant retiring MD-80s, replacing with fewer A320 & A319 with slightly more seats. Yeah, rather than do a laundry list, replace gas hogs!
2. Hedge.
3. Cut marginal routes
4. Upgauge RJs
5. Cut ULH (oh wait, ME3 are cutting...)
Record profits for US airlines will go to fuel.
We're in a synced global economic expansion. That means higher gasoline, jet fuel, and other commodity prices. Supply and demand means prices must go up to increase production.
Or buy a NEO or MAX and cut fuel 15% to 20%. This price increase will result in earlier retirement of heavy fuel burning. Moderate fuel burning will go to lower utilization.
This is good news for the A350, 787, NEO, MAX, C-series, MRJ, E2-jets, and 777X. It is bad news for everything else.
Lightsaber
iad51fl wrote:The airlines can start using that "baggage fee" and "fuel surcharge" money they have been collecting over the last 3-4 years to pay the difference.
MIflyer12 wrote:Hedging doesn't reduce long-term fuel costs. Over time counterparties keep demanding higher strike prices. Hedging isn't cheap, either. Consider it like buying casualty or liability insurance, $ hundred millions at a whack.
For a while now AA's Parker has avoided hedging. Maybe it was necessary when early 00s US didn't have any money. We'll get a few cycles in and then see if it was smart.
mm320cap wrote:lightsaber wrote:Kilopond, you beat me too it!
Link for others to iATA jet fuel monitor.
http://www.iata.org/publications/econom ... index.aspx
Perspective:
Fuel is now $89.30/bbl
Fuel was $120 to $140/bbl for years.
Solutions?
1. Allegiant retiring MD-80s, replacing with fewer A320 & A319 with slightly more seats. Yeah, rather than do a laundry list, replace gas hogs!
2. Hedge.
3. Cut marginal routes
4. Upgauge RJs
5. Cut ULH (oh wait, ME3 are cutting...)
Record profits for US airlines will go to fuel.
We're in a synced global economic expansion. That means higher gasoline, jet fuel, and other commodity prices. Supply and demand means prices must go up to increase production.
Or buy a NEO or MAX and cut fuel 15% to 20%. This price increase will result in earlier retirement of heavy fuel burning. Moderate fuel burning will go to lower utilization.
This is good news for the A350, 787, NEO, MAX, C-series, MRJ, E2-jets, and 777X. It is bad news for everything else.
Lightsaber
OR raise ticket prices
mm320cap wrote:OR raise ticket prices
PatrickZ80 wrote:The five largest container vessels in the world cause just as much pollution as all the cars, trucks, busses, etc. on this planet.
Flybird wrote:Fuel prices surged to multi-year highs in the domestic market, dragging the profits of airline companies
https://news.alphastreet.com/airline-co ... skyrocket/
The potential damage to the sector from the rising fuel prices can be gauged from the downbeat outlook announced by American Airlines (AA), which owns the largest aircraft fleet in the world, projecting a staggering $2 billion increase in costs this year due to high gasoline prices!
JetBlue forecasted a decline in RASM for the coming quarter.
Meanwhile, United Airlines managed to override the impact of a 26% increase in fuel costs in the first quarter and registered higher earnings.
RyanairGuru wrote:[twoid][/twoid]JackMeahoff wrote:There are a lot of wells in North Dakota, Texas and the Gulf of Mexico that have been shut off for the last few years. Once oil breaches $80 or $100 per barrel they will be turning them on, sending prices back downward. I know a guy in Texas and half of his small wells are capped for the time being.
Exactly. The chance of oil getting over $100 is actually very low. The beauty of the fracking wells in North Dakota, Oklahoma etc is that they can be turned on and off at will. Production will increase so long as prices keep rising.
airportugal310 wrote:Brent closed at $75/bbl today, with WTI behind it as usual at $68
To add to your post, I think we are going to see a lot of "oddball" routes added during cheap fuel finding their way out the door. They were only money makers at lower bbl prices, I suspect
mm320cap wrote:
OR raise ticket prices
Dutchy wrote:This will probably happen indeed. But price elastics will tell us that there will probably less demand with higher prices.
Most of the planes mentioned can't be delivered in the next few years if ordered now, anyways. And I don't believe this will boost the 777X, a niche plane.
PatrickZ80 wrote:If ground transportation switches to durable solutions (electricity, hydrogen, etc) that means the demand for oil will drop so prices will go down again. Aviation is more difficult to switch to durable solutions than ground transport, so they'll continue to use the little bit of oil that's left.
At this moment the largest users of oil are ships, but I can imagine in the future they'll become durable as well. The five largest container vessels in the world cause just as much pollution as all the cars, trucks, busses, etc. on this planet. If someone would build a container vessel that would run on hydrogen that would make a huge step in consuming less oil. Hydrogen can be produced anywhere so it would be perfect as fuel for a ship.
lightsaber wrote:This won't help the A330NEO or 777X. Cest la vie. There is more than one niche player out there...
crownvic wrote:Very simple...to offset increased fuel costs, the airlines are going to impose a takeoff fee and if the landing is successful a landing fee to the passenger.
pwm2txlhopper wrote:With all the revenue they make off bag fees that were implemented 10+ year ago in response to record high fuel prices, i don't have much sympathy. Fuel has been down for years now, but they still collect millions of dollars everyday for simply checking your bag.
airbazar wrote:Flybird wrote:Fuel prices surged to multi-year highs in the domestic market, dragging the profits of airline companies
https://news.alphastreet.com/airline-co ... skyrocket/
The potential damage to the sector from the rising fuel prices can be gauged from the downbeat outlook announced by American Airlines (AA), which owns the largest aircraft fleet in the world, projecting a staggering $2 billion increase in costs this year due to high gasoline prices!
JetBlue forecasted a decline in RASM for the coming quarter.
Meanwhile, United Airlines managed to override the impact of a 26% increase in fuel costs in the first quarter and registered higher earnings.
Oh please, cry me a river. Airlines have been charging us a "fuel surcharge" all these years while oil prices have been the lowest they've been in decades, and laughing all the way to the bank.
JackMeahoff wrote:There are a lot of wells in North Dakota, Texas and the Gulf of Mexico that have been shut off for the last few years. Once oil breaches $80 or $100 per barrel they will be turning them on, sending prices back downward. I know a guy in Texas and half of his small wells are capped for the time being.
slider wrote:Airlines in the post-consolidation world have proven they can make money when Jet A is at $120/bbl.
I'm far less concerned about oil prices insofar as airlines than I ever have been previously.
andrew50 wrote:Remember the baggage fees were imposed because of oil being $100 a barrel! The fares were high when oil was at $50 plus ripping people off on all the extra charges, baggage fees, and the biggest ripoff of any business I can think of the $200 change fee. They are making millions on all those fees. I have a hard to listening to the airlines whining again about fuel prices!
michman wrote:airbazar wrote:Flybird wrote:Fuel prices surged to multi-year highs in the domestic market, dragging the profits of airline companies
https://news.alphastreet.com/airline-co ... skyrocket/
The potential damage to the sector from the rising fuel prices can be gauged from the downbeat outlook announced by American Airlines (AA), which owns the largest aircraft fleet in the world, projecting a staggering $2 billion increase in costs this year due to high gasoline prices!
JetBlue forecasted a decline in RASM for the coming quarter.
Meanwhile, United Airlines managed to override the impact of a 26% increase in fuel costs in the first quarter and registered higher earnings.
Oh please, cry me a river. Airlines have been charging us a "fuel surcharge" all these years while oil prices have been the lowest they've been in decades, and laughing all the way to the bank.
Airlines don't call them fuel surcharges because they are about setting a non-discountable base for corporate contracts, not about fuel costs. It has nothing to do with the cost of an airline ticket which is set by supply and demand and competition (among other factors). A DL roundtrip V fare is $671.71 on JFK-LHR, while a V fare on DTW-LHR is $1012.71. And yet they both have a $300 carrier-imposed surcharge. If you were to ban these surcharges, they would simply raise the base fares on these routes. As long you are not buying discounted corporate fares, it has zero impact on you.
Techfellow wrote:Fricking frackers haven't caught up yet to OPEC's attempts to drive up prices by reducing surplus from the marketplace.
lightsaber wrote:Perspective:
Fuel is now $89.30/bbl
Fuel was $120 to $140/bbl for years.
Solutions?
1. Allegiant retiring MD-80s, replacing with fewer A320 & A319 with slightly more seats. Yeah, rather than do a laundry list, replace gas hogs!
2. Hedge.
3. Cut marginal routes
4. Upgauge RJs
5. Cut ULH (oh wait, ME3 are cutting...)
A380MSN004 wrote:
+1 on that.
It happened few month ago.
24 Jan 2018 Brent went to 72 USD and then a Shale Oil went on the market.
13 Feb 2018 Brent went down to 62 USD and then price vary from 62 to 66 USD until recently.
Apparently profitability of the Shale Oil is around 60 USD from what experts said.
Let's see if this happen again.
slider wrote:Airlines in the post-consolidation world have proven they can make money when Jet A is at $120/bbl.
1989worstyear wrote:Looks like there will be no 752's or 763's flying pax in 5 years as I predicted...
michman wrote:Airlines don't call them fuel surcharges because they are about setting a non-discountable base for corporate contracts, not about fuel costs. It has nothing to do with the cost of an airline ticket which is set by supply and demand and competition (among other factors). A DL roundtrip V fare is $671.71 on JFK-LHR, while a V fare on DTW-LHR is $1012.71. And yet they both have a $300 carrier-imposed surcharge. If you were to ban these surcharges, they would simply raise the base fares on these routes. As long you are not buying discounted corporate fares, it has zero impact on you.
parapente wrote:Any airline that does not work in advance to these oil spikes (it won't be the last) are stuck as you cannot change aircaft that quickly.
Best thing is to learn and get modern aircaft in as soon as business plans allow.
I guess the sort of aircaft to be getting rid of are.
744's,all 340's,772's?,767's? But most of these are going soon anyway.
As a side benefit.Having the 'greenest' aircaft in general does send a positive message to governments about the industry as a whole 'doing their best' for the environment/CO2 issues.
Clearly (especially in Europe) the car is being very heavily targeted.I also note that there has been some major movement within the global shipping industry in the last couple of months.
Next stop Aircaft?? Best to move before you are pushed in general imho.