Originally Posted by
fosters
Absolutely, but if he can't wrap his head around the fact that Exxon has paid more for oil to refine, hence that is what is driving the of gasoline up, he won't have a snowballs chance in 'H-E double hockey sticks' of factoring the falling dollar into the equation. Honestly I don't even know how to factor it in, I'm not an economist. But logically I can see how it would effect what we pay for a world economy.
Part of the problem is guys see the $105/bbl price and the "sticker shock" immediatly triggers their anxiety over how much it's costing their companies per year, because the airlines don't have the pricing power on tickets right now to make up the difference.
Inflation is too many dollars chasing too few goods. The weak dollar fuels that senario. Airlines are on a different formula, with too few passengers chasing too many seats, so that even though ticket prices aren't going down in nominal terms, they are going down in real terms as the dollar weakens. In other words, ticket prices are deflating relative to oil and other costs, hence the profit squeeze and the decelerating earnings for many airlines in the 4th quarter. JP