oil, and other related and unrelated topics
 

I think this is pretty good info on the oil Market:

"Managed money accounts on the NYMEX own a record 268,622 contracts (i.e. 269 MMbbls) of WTI crude oil. The storage capacity at the NYMEX hub in Cushing, OK is only around 45 MMbbls. In other words, speculators own nearly 6× the capacity currently available at Cushing. It does not get any clearer which way Wall Street is trying to take oil.

Bottom line, NYMEX WTI aside, light sweet crude oils (e.g. LLS, Brent, and Bonny Light) are trading comfortably above $115 a barrel. At this level retail gasoline works out to around $3.70 a gallon. The national average for gasoline as of last Monday was $3.39 a gallon. Thus, at the current rate Americans face the prospect of another 30 cent increase at the pump this summer.

We know from recent history that demand inelasticity, be it in the U.S., Europe and yes, even China, begin to wane at these retail prices."

Other info:
CVG pireps feb newsletter stated that we were projecting a $1.5B profit this year, and that was with oil at $90, and the crack spread on jet fuel another $25 on top of that. The spike would have to be not only extremley steep, but protracted to wipe that out. Not saying that can't happen, but fundamentals certainly don't support it without something extreme happening.

Unrelated:
JG flt ops 411 this week talked more about the RFP, and stated they are looking at "anything and everything" that might fit our network needs in the future. This included Boeing, Airbus, Embraer, Bombardier (specifically mentioned C-series,) as well the new Russian, Japanese, and Chinese jets.

Well, I guess NWA knew how to do it better. ;) :D

I heard that first hand from a network guy at a base-ops visit in SLC early last year (when there still was a MD90 base in SLC)

A pilot asked about the what the difference was between the 160 seat MD90 and the 160 seat 738.

Apart from "lower pilot costs" (yes he did say that in front of a whole group of pilots) he said the 738 takes 25 days to break even with 5 days of "gravy" whereas the numbers are reversed for the MD90....

Cheers
George

Yeah... very funny...

But seriously, I think that might be part of the problem. I don't have any idea if any changes have been made to the routine maintenance schedule on the DC-9 since the merger, but that wouldn't surprise me and I'm wondering if it could be part of the problem. Especially with an airplane that old, if the reliability was as good as everyone says, I think I would stick with what was working for NWA.

Any other ideas?

The question is does this or a further spike in gas mean fewer leisure and businesses travelers as people curtail buying tickets as they adjust their spending habits thanks to higher gas and food costs among other things?

Or do people go towards airplanes as they can be a lot cheaper than driving?

"...stick with what was working for NWA." sounds like a good idea. :D


No. Seriously, I think the DC-9 was one of the most reliable fleets at NWA. What is being done differently, I don't know. :confused:

You sure about that? Nearly every mechanical delay I had while riding in the NW system involved a Saab, Pinnacle, or a DC-9....

Something smells about those numbers... Sounds like one of those things that changes everytime they need to sell something. I don't doubt that the MD-90 is a lot cheaper, but that doesn't quite pass the taste test.

That's wild. All this time they have been trying to pay down their debt from the TWA merger. Another merger fund??? :eek:

I hope so. Let them buy AK Air and we will build the West Coast Business grass roots. Maybe the 100 seater RFP is a contingency to the above scenario???