Cost of fuel getting out of hand....can't make money if this continues...
03-14-2008, 05:23 PM
#1
HOSED BY PBS AGAIN
Thread Starter
Joined APC: Mar 2005
Posts: 1,713
Cost of fuel getting out of hand....can't make money if this continues...
Everyone keeps saying the airlines need to raise their prices, but how high can we raise them, and at what price do the passengers finally say "sorry, but it's cheaper to stay home"? This blurb was in CAL's daily newletter to its employees. Pretty soon it won't be feasible to fly the longhaul routes anymore. I hope the oil people are happy with what's happening.....
----------------------------------------
The price of jet fuel reached an all new high today of
$139.67 per barrel, and CO’s cost to fly continues to increase.
A flight from Delhi
to EWR burns 35,700 gallons, at $3.14 per gallon, or $112,100 of fuel. With 260
customers on board, that equals almost $430 per passenger for fuel alone before
factoring in the cost of the airplane, maintenance, crew, landing fees,
catering and other related expenses. Fuel is now CO’s biggest fixed
expense, increasing 45 percent from February 2007, to February 2008. Crude
closed at $110.21, down $.12 from Thursday.
----------------------------------------
The price of jet fuel reached an all new high today of
$139.67 per barrel, and CO’s cost to fly continues to increase.
A flight from Delhi
to EWR burns 35,700 gallons, at $3.14 per gallon, or $112,100 of fuel. With 260
customers on board, that equals almost $430 per passenger for fuel alone before
factoring in the cost of the airplane, maintenance, crew, landing fees,
catering and other related expenses. Fuel is now CO’s biggest fixed
expense, increasing 45 percent from February 2007, to February 2008. Crude
closed at $110.21, down $.12 from Thursday.
03-14-2008, 05:43 PM
#2
With The Resistance
Joined APC: Jan 2006
Position: Burning the Agitprop of the Apparat
Posts: 6,191
[QUOTE=ewrbasedpilot;340854] I hope the oil people are happy with what's happening.....
----------------------------------------
QUOTE]
Unlike most of your posts, markets aren't emotional in the long run. Airlines that fail to tie their prices to their cost aren't going to last very long. We could see another round of bankrupt players.
The public will probably reduce their travel, but railing against the price of oil is like railing against the sky being blue. Adapt or join the bones of other failed Airlines.
I wish I had some more cheerful news for you, but there just doesn't seem to be any right now. Things have a way of changing over time though.
----------------------------------------
QUOTE]
Unlike most of your posts, markets aren't emotional in the long run. Airlines that fail to tie their prices to their cost aren't going to last very long. We could see another round of bankrupt players.
The public will probably reduce their travel, but railing against the price of oil is like railing against the sky being blue. Adapt or join the bones of other failed Airlines.
I wish I had some more cheerful news for you, but there just doesn't seem to be any right now. Things have a way of changing over time though.
03-14-2008, 05:54 PM
#3
HOSED BY PBS AGAIN
Thread Starter
Joined APC: Mar 2005
Posts: 1,713
......... markets aren't emotional in the long run. Airlines that fail to tie their prices to their cost aren't going to last very long. .........[/QUOTE]
Have you been watching the markets lately? Someone farts wrong and the markets go to pieces............. I've started cutting back watching CNBC since it's so damn depressing every day. The oil traders are in heaven while everyone else seems to be in hell or at least on their way. There's excuses every day as to why oil should continue to rocket skyward, and most of them are bogus to say the least. We're beginning to price ourselves out of the market. Seems like the last few years have watched America plunge off a cliff with no bottom in sight while our government comes back with brilliant statements such as "we're just in a little slowdown, but everything is fine"...................yeah, right.
Have you been watching the markets lately? Someone farts wrong and the markets go to pieces............. I've started cutting back watching CNBC since it's so damn depressing every day. The oil traders are in heaven while everyone else seems to be in hell or at least on their way. There's excuses every day as to why oil should continue to rocket skyward, and most of them are bogus to say the least. We're beginning to price ourselves out of the market. Seems like the last few years have watched America plunge off a cliff with no bottom in sight while our government comes back with brilliant statements such as "we're just in a little slowdown, but everything is fine"...................yeah, right.
03-14-2008, 06:06 PM
#4
With The Resistance
Joined APC: Jan 2006
Position: Burning the Agitprop of the Apparat
Posts: 6,191
Have you been watching the markets lately? Someone farts wrong and the markets go to pieces............. I've started cutting back watching CNBC since it's so damn depressing every day. The oil traders are in heaven while everyone else seems to be in hell or at least on their way. There's excuses every day as to why oil should continue to rocket skyward, and most of them are bogus to say the least. We're beginning to price ourselves out of the market. Seems like the last few years have watched America plunge off a cliff with no bottom in sight while our government comes back with brilliant statements such as "we're just in a little slowdown, but everything is fine"...................yeah, right. [/QUOTE]
This may come as a shock, but governments can't control the markets. They may levy taxes which makes everything more expensive, but their ability to control the price of a given commodity in World markets is nil.
It is up to the Airlines to make the bottom line black, the government skims 25% off the top of every ticket, the rest is up to the individual companies.
[/QUOTE]This may come as a shock, but governments can't control the markets. They may levy taxes which makes everything more expensive, but their ability to control the price of a given commodity in World markets is nil.
It is up to the Airlines to make the bottom line black, the government skims 25% off the top of every ticket, the rest is up to the individual companies.
03-14-2008, 06:18 PM
#5
Gets Weekends Off
Joined APC: Jan 2008
Position: 767 FO
Posts: 396
It's almost as though we should expect some serious contraction in the airline industry...some major league shrinkage. If not, then some major league reductions in pay and quality of life...as if it couldn't get any worse.
Correct me if I'm wrong, but is it 3 strikes and you're out w/ regards to Chapt. 11 bankruptcy and the airlines? It would be interesting to see which airlines are pushing the limit in terms of their existing number of Chapt. 11 bankruptcy filings.
Nice job ALPA/Unions waiting for the price of oil to hit $110/bbl to start asking for contract improvements. Looks like we missed the boat again. Good luck trying to negotiate contract improvements now!
Correct me if I'm wrong, but is it 3 strikes and you're out w/ regards to Chapt. 11 bankruptcy and the airlines? It would be interesting to see which airlines are pushing the limit in terms of their existing number of Chapt. 11 bankruptcy filings.
Nice job ALPA/Unions waiting for the price of oil to hit $110/bbl to start asking for contract improvements. Looks like we missed the boat again. Good luck trying to negotiate contract improvements now!
03-14-2008, 06:44 PM
#6
Gets Weekends Off
Joined APC: Dec 2005
Position: Leftof longitudinal
Posts: 1,899
Originally Posted by ewrbasedpilot
Everyone keeps saying the airlines need to raise their prices, but how high can we raise them, and at what price do the passengers finally say "sorry, but it's cheaper to stay home"? This blurb was in CAL's daily newletter to its employees. Pretty soon it won't be feasible to fly the longhaul routes anymore. I hope the oil people are happy with what's happening.....
----------------------------------------
The price of jet fuel reached an all new high today of
$139.67 per barrel, and CO’s cost to fly continues to increase.
A flight from Delhi
to EWR burns 35,700 gallons, at $3.14 per gallon, or $112,100 of fuel. With 260
customers on board, that equals almost $430 per passenger for fuel alone before
factoring in the cost of the airplane, maintenance, crew, landing fees,
catering and other related expenses. Fuel is now CO’s biggest fixed
expense, increasing 45 percent from February 2007, to February 2008. Crude
closed at $110.21, down $.12 from Thursday.
----------------------------------------
The price of jet fuel reached an all new high today of
$139.67 per barrel, and CO’s cost to fly continues to increase.
A flight from Delhi
to EWR burns 35,700 gallons, at $3.14 per gallon, or $112,100 of fuel. With 260
customers on board, that equals almost $430 per passenger for fuel alone before
factoring in the cost of the airplane, maintenance, crew, landing fees,
catering and other related expenses. Fuel is now CO’s biggest fixed
expense, increasing 45 percent from February 2007, to February 2008. Crude
closed at $110.21, down $.12 from Thursday.
Just looked at the fares advertised by airlines starting April 08 and return April 15. All roundtrip fares EWR-Delhi-EWR.
Continental Airlines charges $880.
American was worse at $795 (one stop)
Northwest wants $1483 (one stop)
United wants $1560 (one stop)
Delta Air Lines $1794 (one stop) or $1241 two stops.
Air India wants nearly $5000.
Tell me airline managements are smart
CAL and AMR should raise fares and not blame the market. They are well within the market to raise rates. Some of the other companies are raising rates. Air India hmmmmmHope all well EWR
03-14-2008, 06:45 PM
#7
Line Holder
Joined APC: May 2005
Position: B737 CA
Posts: 49
Originally Posted by ewrbasedpilot
Everyone keeps saying the airlines need to raise their prices, but how high can we raise them, and at what price do the passengers finally say "sorry, but it's cheaper to stay home"? This blurb was in CAL's daily newletter to its employees. Pretty soon it won't be feasible to fly the longhaul routes anymore. I hope the oil people are happy with what's happening.....
----------------------------------------
The price of jet fuel reached an all new high today of
$139.67 per barrel, and CO’s cost to fly continues to increase.
A flight from Delhi
to EWR burns 35,700 gallons, at $3.14 per gallon, or $112,100 of fuel. With 260
customers on board, that equals almost $430 per passenger for fuel alone before
factoring in the cost of the airplane, maintenance, crew, landing fees,
catering and other related expenses. Fuel is now CO’s biggest fixed
expense, increasing 45 percent from February 2007, to February 2008. Crude
closed at $110.21, down $.12 from Thursday.
----------------------------------------
The price of jet fuel reached an all new high today of
$139.67 per barrel, and CO’s cost to fly continues to increase.
A flight from Delhi
to EWR burns 35,700 gallons, at $3.14 per gallon, or $112,100 of fuel. With 260
customers on board, that equals almost $430 per passenger for fuel alone before
factoring in the cost of the airplane, maintenance, crew, landing fees,
catering and other related expenses. Fuel is now CO’s biggest fixed
expense, increasing 45 percent from February 2007, to February 2008. Crude
closed at $110.21, down $.12 from Thursday.
03-15-2008, 07:59 AM
#8
Gets Weekends Off
Joined APC: Oct 2005
Position: Capt. B737
Posts: 329
This blurb was in CAL's daily newletter to its employees. Pretty soon it won't be feasible to fly the longhaul routes anymore
03-15-2008, 11:34 AM
#9
HOSED BY PBS AGAIN
Thread Starter
Joined APC: Mar 2005
Posts: 1,713
Originally Posted by Daytripper
Do yourself a favor, along with cutting back on CNBC, stop getting worked up over the company daily brow-beatings. I would say most employees are well versed on the high price of fuel, as most of us have vehicles and homes to power. We don't need daily reminders. There are negoitiations in progress.....it's part of the game. They tell you that for every dollar increase in the price of crude, it increases fuel cost by $40 mil. a year. Do they tell you how much added revenue those $10 fare increases add per year? Do they explain why the fuel hedge dept. has been asleep at the wheel they past couple of years? No, they'd rather pound you bad news to get you in the fetal position.
I get tired of hearing about the "asleep" at the wheel fuel hedgers. First off, do YOU know what the price will be of jet fuel in a month? A year? Two years? If so, you might want to get in the business. If we hedged at $100 a bbl now and the price dropped to $70, you'd be complaining that some idiot didn't do his homework in the hedging dept. Then again, if oil went to $150, you'd say he was a genius. My point is, is that it's very expensive to hedge, but even moreso if you're wrong. Are you willing to make that bet? Wanna bet your career on that kind of decision? I don't have to have bad news pounded into me, I'm seeing it EVERY DAY lately...............
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