SWA Hedging
05-04-2008 | 06:45 PM
#51
Gets Weekends Off
Joined: Jun 2006
Posts: 998
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From: B737/Capt
Now back to how unbelievably lucky SWA is?
05-05-2008 | 10:24 AM
#54
APC co-founder
Joined: Feb 2005
Posts: 5,853
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From: B777
Read this: http://www.kellogg.northwestern.edu/...s/jet_fuel.pdf
Here are the cliff notes:
Δ Jet Fuel Spot Price – H * Δ Futures contract
where H is the hedge ratio.
The value of H will determine the number of futures contracts to enter. It is calculated as follows:
H = ρ * σ [spot] / σ [futures]
where:
ρ: the correlation between the spot jet fuel price and selected futures contract
σ: the standard deviation, or volatility, of each respective contract
where H is the hedge ratio.
The value of H will determine the number of futures contracts to enter. It is calculated as follows:
H = ρ * σ [spot] / σ [futures]
where:
ρ: the correlation between the spot jet fuel price and selected futures contract
σ: the standard deviation, or volatility, of each respective contract
05-05-2008 | 11:20 AM
#55
HOSED BY PBS AGAIN
Joined: Mar 2005
Posts: 1,713
Likes: 0
[QUOTE=Spanky189;377834][QUOTE=ewrbasedpilot;376498] They don't understand that flying a B777 for 16 hours across the pond is NOT the same as hopping on a B737 from AMA to IAH.
How is that harder requiring more pay? (Yes, not the SAME, just different)
1. From the front, it's one takeoff and one landing.
2. You (and the other 2 pilots) get to take a 'nap' in first class between those events.
3. Service in the cabin is handled by the FAs.
4. Getting Oceanic Clearance is not rocket science.
5. Long lay-over to follow your 16 hour torture.
Compare that to 15+ takeoffs and 15+/- landings with 13+/- hour overnights on a 3 day trip blocking 21 hours. [Obviously not all trips].
Which 3 day trip do you think involves more risk? (I guess that would be a 4 day trip for the 777 ocean crossing).
If you think pay should be based on risk, I would think SW would win.
If you think pay should be based on company profits, SW would win.
If you think pilot pay is being eroded by management, you are right!!
Just as flying a C-150 is the same as flying a C-5 Galaxy, they are both airplanes although one is much more complex and requires a lot more "babysitting", therefore knowledge and ability. (It's not what little you do, it's how much you know). Flying into foreign airports is not as easy as it sounds. Try it and you'll see real quick (and then you'll be saying how you're not being paid enough for what you do...) Being in charge of 10 FA's vs 3 is quite a different story too. Crossing 14 time zones in 3 days isn't all that easy either, coupled with the language barriers of the controllers. (Oceanic clearance isn't tough, it's everything in-between that is). Flying back and forth between DAL and TUL isn't tough.....but flying for 16 hours straight with the sun in your face or on the backside of the clock is. How is flying into small airports riskier than foreign airports? I flew all over Europe in my last company and I'd beg to differ with you on how "risky" 99% of US airports are. (Maybe SAN MIGHT be a bit risky with that parking garage plopped right on short final, but the others.......nah, not a problem). Recuperating after a 16 hour flight isn't all that easy, so until you've done it........
But I do agree with pay being eroded, and it's not just by management, it's by other companies who keep trying to lower the bar and passengers who think they should be allowed to fly for nothing.............
How is that harder requiring more pay? (Yes, not the SAME, just different)
1. From the front, it's one takeoff and one landing.
2. You (and the other 2 pilots) get to take a 'nap' in first class between those events.
3. Service in the cabin is handled by the FAs.
4. Getting Oceanic Clearance is not rocket science.
5. Long lay-over to follow your 16 hour torture.
Compare that to 15+ takeoffs and 15+/- landings with 13+/- hour overnights on a 3 day trip blocking 21 hours. [Obviously not all trips].
Which 3 day trip do you think involves more risk? (I guess that would be a 4 day trip for the 777 ocean crossing).
If you think pay should be based on risk, I would think SW would win.
If you think pay should be based on company profits, SW would win.
If you think pilot pay is being eroded by management, you are right!!
But I do agree with pay being eroded, and it's not just by management, it's by other companies who keep trying to lower the bar and passengers who think they should be allowed to fly for nothing.............
05-05-2008 | 11:40 AM
#56
Gets Weekends Off
Joined: Mar 2007
Posts: 134
Likes: 0
From: No more APC 4 me. Quit because of moderation.
Does this include airlines that don't pay health insurance to new hires?
05-05-2008 | 11:46 AM
#57
Gets Weekends Off
Joined: Nov 2005
Posts: 2,002
Likes: 0
05-05-2008 | 11:58 AM
#58
Gets Weekends Off
Joined: Nov 2005
Posts: 2,002
Likes: 0
SWA has excellent hedging strategies which they can afford and the others can't due to their tremendous overhead expenses. Therefore they can keep the ticket prices "artificially" low. If they were paying the same for their oil, their would be NO WAY they could fly their planes with oil at what it is. The other airlines are constantly compared to SWA even though the business models are COMPLETELY different. They figure if SWA can make money, everyone else should. They don't understand that flying a B777 for 16 hours across the pond is NOT the same as hopping on a B737 from AMA to IAH. They think the costs are the same for a landing slot in FRA for the B777 as they are for a B737 landing in ABQ. They think we can turn a B777 around in 15 minutes just like SWA does. So when they DO fly on someone else, they are totally mislead about the dynamics and complexity of what we do. SWA is great at what they do, but it is so totally different than what the majors do. Yes, we both carry passengers, but you don't have first class, transfer luggage, fly internationally, fly into EWR, ORD, JFK, YYZ, etc. You don't serve meals, and fly transcon redeyes from LAX to EWR. You fly one type of plane and we don't. Their are lots of similarities, but many MAJOR differences. Unfortunately though, these passengers think SWA is the best thing since sliced bread, but can't fathom that we operate differently. So, they are either extremely satisified with what they experience or totally put off. SWA didn't have any planes stranded outside the USA on 9-11. It cost the airlines with int'l flights BILLIONS in lost revenue. No one ever said anything about that, because the news media was totally absorbed by the fact that SWA made a profit and gave out the so-called "bailout" money as profit sharing. No mention of thousands of pax being stranded in BDA with the airlines paying out $10's of thousands in hotel bills. SWA didn't have that problem. As I said before, SWA is a well managed airline, but they are familiar with their territory, and like anything else, once you're out of your comfort zone, things change rapidly.
if your 16 hour/international flying isn't generating enough revenue to sustain it then you should stop doing it. I remember hearing your management say they wouldn't make money on specific routes even if they were full. time to either pull out or raise fares. that's just plain bad management.
I heard your #2 guy talk about how different you were than all of the LCC's and that you offer a different product and blah blah blah. his last sentence was "but we won't get beat on prices" if you are so different then you can charge more for that product. ie those meals, blankets and international flights. just face facts that southwest is kicking everyones ars right now and your hotel cost were and are not your problem.
Last edited by Eric Stratton; 05-05-2008 at 12:05 PM.
05-05-2008 | 12:03 PM
#59
Gets Weekends Off
Joined: Nov 2005
Posts: 2,002
Likes: 0
to see who is to blame a pilot only needs to look in the mirror and see that it is him or her...
05-05-2008 | 04:28 PM
#60
HOSED BY PBS AGAIN
Joined: Mar 2005
Posts: 1,713
Likes: 0
Guess you could log it in with pilots who have to buy a type rating to get an INTERVIEW......yep, that doesn't even guarantee the job, and the cost? Oh around $7,000 or so if you're lucky. Yep, the #1 airline can't even afford to type it's newhires............. I can buy medical insurance for a year for that amount. 
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