We will never see $60 per barrell again. Never see $2.50/gallon at the pump again either. Days of cheap oil are gone...so fares and the economy will have to adjust.

 

if you look at the last graph that was on here you would see why people know oil will readjust once these oil cronnies get out of office and somebody puts things in check. also to note when an oil mongral gets out of office maybe somebody will do something to stop this increase in consumption. Why do people need to drive huge ass vehicles to work with only one person in it.

 

As a passenger, another factor is SWA's service culture. While I'm not a fan of open seating, once you get "past" that- emotionally, mentally, and physically- their service shines. Of course, that is considered in a coach environment.

On legacy carriers the availbility of upgrades has become much lower. The quality of first class (at least domestically) is really not good. I've had multiple instances of getting upgraded domestically on legacy airlines where I didn't "deserve" an upgrade (so to speak) and, after the flight, thought "why in the hell would anyone be loyal to any specific airline for this?"

But it's not only the "lure" of first that has declined- service is subpar in coach as well.

Have the legacy lines diluted the benefit of frequent flyer programs? Yes. They've made them a profit center- through affinity programs, etc. So, in effect, they have strayed from their core product if you will. I don't know if that is good financial decision because I don't know the actual financials- but, right now, it's a fact (IMO-not humble-but experienced) that SWA is kicking butt on ticketing, gate, and cabin service as well.

 

I bet Southwest will increase fares...and all the other airlines will follow suit...perhaps saving the industry as a whole.

 

Wow! We agree on something!

I don't understand how anyone can think that oil will come down. Why should it? We are all still buying gas right? You all think they will lower the price out of the goodness of their heart?

 

Freightpuppy...I have 2 reasons why fuel prices will decrease:

1. History

2. Economics--supply and demand

History...prices have risen and fallen for the past 60 years. Of course, overall the price has gone up from the 1940s...so has everything else. Not sure how much they will fall...but they will.

Economics...Every SOB with the means is going after oil and we will have excess supply at some point. Even w/ the Chinese consumption approaching ours. OPEC knows that at the current price, even the Americans will begin to find some alternatives...maybe just a small percentage...but that will have an impact.

We probably will never see 1.50 gas again! My energy stocks are doing great though!!!!!!!!!!!


Check out the price of bottled water...get ****ed at that!!!

 

I can't help but laugh. . . this is so sad.

 

It is a misconception to think that oil companies are "gouging" everyone. Oil is a commodity traded on the open market, and prices are governed by supply and demand.

It is easy to look at an oil company that made a billion dollar profit and say they are overcharging. But that several billion dollar profit come on over $100 billion dollars in sales. Oil companies take a % percentage of profit from oil sales, and naturally as the price increases, the % percentage becomes a larger chunk of $$ money. Oil companies are monster corporations (remember they are vertically integrated) that makes huge profits, but look at their profits as a percentage of revenue, and it is like 8%. Imagine a pizza company, it cost them $0.92 cents to make a pizza, and they sell it for $1.00. Ya right!!! Most companies double or tripple the "cost" of the product and sell it for that price.

As someone who has looked into investing in oil companies, and who has done a lot of research, I have some insight. The biggest problem is finding oil. Everyone thinks there is a giant ocean of oil and all we have to do is simply drill down and we will hit oil. Not true. In fact the world's oil supply is like a bunch of tiny puddles. Many drills come up DRY. Drilling is more of an art (and luck) than it is a science. Really! Oil infact does cost more to drill for than it did several years ago. Saudi Arabia is drying up, and they are keeping it a secret.


The future...
We cannot achieve stable energy prices using fossil fuels. There will always be a supply issue. I feel that we are moving towards 100% electric cars. Hybrid's are just a stepping stone. I believe lithium-ion batteries have the potential to power cars (without the drawbacks of limited range/power). They are still falling in price. Cars could then be plugged in at night when the power grid is underused. Electricity is the cheapest known way to power an automobile. Electricity generally comes from oil, coal, or nuclear. In California, I know about 30% of the energy is from renewable sources (hydro, wind, solar). But to deal with the massive increase that would be required to power cars, I believe we will be using much more efficient solar energy. Solar panels are incredibly inefficient. With the advances in nanotechnology, we WILL make quantum leaps in solar efficiency. Someone would win a nobel prize if they designed an 80% efficient solar sell. That would be enough to allow cars to be driven off electricity.

Ethanol/Methanol are not a solution. E85 is a blend of 85% ethanol and 15% gasoline that has been hyped up recently. The fact is that you get about 60% of the BTU's you would get from normal gasoline (basically, you need more gallons of E85 to get the same kick as gas), eliminating any cost savings.
And plane and simple... By using ethanol for energy, you are trying to solve one of the worlds big problems (demand for energy), but hurting the world's BIGGEST problem, and that is world hunger!!
In order to make enough ethanol for the US, we would have to use 75% of our farmland. Not an option. Ethanol will not work.

Hydrogen powered cars may become practical one day, but not in widespread use for MANY, MANY years. Even though hydrogen is the most abundant element in the universe, h2 is rarely found on earth. It is too reactive. It usually reacts to form water. So to get h2 fuel, we have to run the reverse reaction (2 h2o --> 2 h2 + o2), and that takes a good amount of electricity. Hydrogen is very dangerous and powerful (see Hindenberg or Hydrogen bomb). Have you ever seen the ground wires that hydrogen cars must use during fueling? They are massive. The hydrogen needs to be stored at 4 degrees kelvin (approximately -270 C and -500 F) and 10,000psi (can you say explosion). Even at 10,000psi, hydrogen will take up a decent amount of room. Plus you need heavy and thick metal to enclose that that hydrogen (more weight, less room). I cannot see this fuel being used on an airplane, EVER!! Just too dangerous and too many negative aspects to flight (weight, room, etc...)

So I feel you will see all electric cars down the road. Solar energy will help power these. Perhaps hydrogen fuel. This will drastically reduce the demand on crude oil, leaving it for airplanes (and without the volatile price fluxuations).

 

Such insight! Such knowledge! You are wasting your time here! My goodness, you are actually foretelling the future! Please, by all means take your wisdom to the department of energy, maybe drop off this post at the White House. We have no time to waste!

 

Take a look at that oil futures contract chart that was posted earlier in this thread and think about what the oil companies were doing in '98 and '99. They were trying to survive and figure out how to make a profit from super low oil prices. Some of the lessons learned and costs "controls" that were put into place then are reaping rewards now, shown as profits.

The vast majority of electricity in this country is created by burning coal, which is abundantly available. So, we'll all be driving electric cars around, but we wont be able to see anything

I agree with the earlier comment that complaining about Southwest's fuel hedges is a waste of time. Its sort of like saying "it sure would be light out, *if* it werent so dark"

The solution to any commodity price issue is demand. Right now, we have high demand and a tight supply. It remains to be seen if the "problem" will be solved by supply or demand.