Skyrocketing Jet Fuel Costs and Possible Shor
05-17-2022, 07:09 PM
#21
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Joined APC: Dec 2007
Posts: 5,414
Originally Posted by crazyjaydawg
Speaking of reports, United just updated Q2 guidance with TRASM up 23%-25% compared to 2019!
Even with fuel predicted at $4.03 per gallon, they’re expecting 10% margins on 14% less capacity when compared to 2019.
So I have no idea what that journalist in your article was smoking. They were picking and choosing statements/facts from different points in time.
If United with their huge exposure to Asia is still forecasting a 10% margin, with $4.03/gallon then I expect Delta to be 3-5 points higher!
Sounds like Kirby is saying the biggest issue with revenue management and a slowing of bookings is that they’re trying to raise prices fast enough so that they don’t sellout too quickly, but they’re failing at it!
United 8-K:
https://ir.united.com/static-files/8...9-9614c0d331b6
Even with fuel predicted at $4.03 per gallon, they’re expecting 10% margins on 14% less capacity when compared to 2019.
So I have no idea what that journalist in your article was smoking. They were picking and choosing statements/facts from different points in time.
If United with their huge exposure to Asia is still forecasting a 10% margin, with $4.03/gallon then I expect Delta to be 3-5 points higher!
Sounds like Kirby is saying the biggest issue with revenue management and a slowing of bookings is that they’re trying to raise prices fast enough so that they don’t sellout too quickly, but they’re failing at it!
United 8-K:
https://ir.united.com/static-files/8...9-9614c0d331b6
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05-18-2022, 06:34 AM
#22
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Originally Posted by Trip7
The article and overall issue is about skyrocketing fuel costs and possible fuel shortage not current airline booking trends. Airlines can book to theirs hearts content but will have to return the money if they cannot operate due to a jet fuel shortage. Even if there isn't a shortage, oil is projected to be well of $150/barrel this summer. Going to be interesting
However interesting the summer will be, it won't be worth a second glance for a few months of 150 oil.
05-18-2022, 06:57 AM
#23
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Originally Posted by gloopy
It was higher than that on an inflation adjusted basis before with a much weaker balance sheet and far less efficient fleet.
However interesting the summer will be, it won't be worth a second glance for a few months of 150 oil.
However interesting the summer will be, it won't be worth a second glance for a few months of 150 oil.
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Last edited by Trip7; 05-18-2022 at 07:09 AM.
05-18-2022, 09:43 AM
#24
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[QUOTE=Trip7;3425065]The crack spread on jet fuel has never been this high. Moreover, back then there were no COVID induced supply shortage. I agree it won't be worth a glance IF the supply chain for jet fuel holds up. Time will tell/QUOTE]
Right. I'm not dismissing a rek't supply chain from years of multifaceted policy insanity. That very well may be the case. But if there's no jet fuel to be had due to supply chain collapse, it won't be 150; it'll be way, way higher at that point.*
*unless they institute the hapless authoritarian favorite "price controls" prior to that, which will only exacerbate things. Then the price may very well be a fake 150 (or whatever they "set" it at) and they'll be even less for even longer. That is also a legit possibility.
Right. I'm not dismissing a rek't supply chain from years of multifaceted policy insanity. That very well may be the case. But if there's no jet fuel to be had due to supply chain collapse, it won't be 150; it'll be way, way higher at that point.*
*unless they institute the hapless authoritarian favorite "price controls" prior to that, which will only exacerbate things. Then the price may very well be a fake 150 (or whatever they "set" it at) and they'll be even less for even longer. That is also a legit possibility.
05-18-2022, 01:24 PM
#25
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Joined APC: Apr 2007
Posts: 4,466
Originally Posted by Trip7
The crack spread on jet fuel has never been this high. Moreover, back then there were no COVID induced supply shortage. I agree it won't be worth a glance IF the supply chain for jet fuel holds up. Time will tell
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05-20-2022, 08:18 PM
#29
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Originally Posted by theUpsideDown
Is it just me giggling when they talk about crack spreading?
05-21-2022, 08:14 AM
#30
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Originally Posted by notEnuf
I still don't understand why I'm always tankering fuel into PHL.
