Originally Posted by
Bucking Bar
Many pilot-analysts assume a net sum gain.
That is not how business works in the real world. Lower oil prices are most often a reflection of global demand. Lower demand results in lower ticket prices. The revenue number is a lot larger than the fuel number and a stronger indicator of where are profits are headed than fuel prices.
Oil and airline ticket prices are both leading indicators and they most often move up, or down, concomitantly.
Unless lower oil prices are caused primarily by an increase in production and a glut. Don’t forget the “supply” side of supply and demand. If oil goes up it bad, if oil goes down it’s bad. Sheesh, what is the optimal price from which any deviation, either up or down is bad?
Scoop