Oil prices and profit sharing
#81
Super Moderator
Joined APC: Dec 2007
Position: DAL 330
Posts: 6,868
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.
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.
Scoop
#82
Oil going down doesn't allow the additional incremental price hikes to recover the margin. Revenue stagnates while the increased cost is already established. We only recovered 90% of the fuel increase through fare increases and non-fuel cost reductions. Fare increases to cover fuel cost increases are always laggards.
#83
Super Moderator
Joined APC: Dec 2007
Position: DAL 330
Posts: 6,868
Oil going down doesn't allow the additional incremental price hikes to recover the margin. Revenue stagnates while the increased cost is already established. We only recovered 90% of the fuel increase through fare increases and non-fuel cost reductions. Fare increases to cover fuel cost increases are always laggards.
For all those who are interested in the Oil industry and looking for a good book to read, this book is a must. I read this book a few years ago and subsequently read the follow on book - both extremely well written and very enjoyable to read while providing a great look at the history of oil.
notEnuf - you would love it.
https://www.amazon.com/Prize-Epic-Qu...oney+and+power
#84
Gets Weekends Off
Joined APC: Jul 2010
Position: window seat
Posts: 12,522
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.
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.
#86
Gets Weekends Off
Thread Starter
Joined APC: Feb 2008
Posts: 19,273
#88
For all those who are interested in the Oil industry and looking for a good book to read, this book is a must. I read this book a few years ago and subsequently read the follow on book - both extremely well written and very enjoyable to read while providing a great look at the history of oil.
notEnuf - you would love it.
https://www.amazon.com/Prize-Epic-Qu...oney+and+power
notEnuf - you would love it.
https://www.amazon.com/Prize-Epic-Qu...oney+and+power
#89
From looking at old emails, by mid-January the actual percentage to expect is published and we can go to the profit sharing page and elect where we want the money put. The profit sharing checks are paid on Valentine's day.
#90
Gets Weekends Off
Joined APC: Aug 2008
Position: 320
Posts: 425
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