As you prolly know, the problem is too much capacity. Too many airlines competing for the same routes & pax. With even more startups, I wonder what the future holds. Airline deregulation has proved so sucessful its actually hurting all airlines. Maybe I too should start an airline - Ill have the employees pay me as well as the pax so they can "gain 121 experience".

One thing that I think may really help the majors is the idea of going more global rather than the overwhelmed national market. also food for thought --I think the "customer" has changed pretty rapidly for the airlines. Businesses are no longer dealing with the BS from the airlines and are going corp. or frax. All thats left for the airlines to fight over are the lousy($) vacationer that doesnt exactly have to be there.

well the experts are saying that the number of passengers are suppose to increase dramaticly. I think one source said the # of passengers should almost double by 2020 or something like that. So hopefuly the loads will catch up with Capacity soon. Than the increased demand should rise the fares. Turning the airlines profitable again, than finaly the wages will start to climb back to what they should be. Atleast thats what happens in most industries

I'm announcing a business plan for a new coast-to-coast low cost/low fare carrier!!! And you ALL are welcome to get in on the ground floor (read low seniority numbers:D ) Here is my plan for Sh!th@le Air:
- All pilots will PAY $60K a year to the airline for the first 5 years of employment and in return you will be allowed to fly a fleet of brand new, shiny B787s to some of the most exciting destinations in the country! International service to start shortly. (After 5 years of employment there will probably be potential to possibly earn a juicy salary in the high teens!)

- Flight attendants will be trained monkeys who will live in the overhead compartments. FOs will be responsible for cleaning up after the monkeys.

- Inflight service will consist of vending machines located where the lavs used to be (lavs don't generate revenue and suck to clean) and what ever you can bring aboard in your overstuffed carry-on.

- Hate those short overnights? There are none! Each aircraft will carry 3 crews who just ride on the plane for all of the 3 and 4 day trips and rotate duty periods.

- Think jet fuel is expensive? Our planes will burn promises made to the employee group!

With this business model, profits would be guaranteed and job security will be the furthest thing from your mind! With round trip airfares capped at $50, there will be customers literally breaking down our doors to fly with us! And with shiny new 787s, I'm certain there will be no shortage of pilot applicants.

Now is this a better mousetrap?

HAHAHA the Monkey FA's is the best idea ive ever heard

OOOPS. You just gave yourself away as big-time CLUELESS...

The way fuel hedges work is that you agree to buy fuel at a fixed cost based on todays KNOWN cost and any EXPECTED changes down the road...if everything goes as planned buyer and seller break even (seller maybe gets a small commission). If prices go up or down relative to the hedge, SOMEBODY loses their ass. Whover sold SWA all those hedges lo$t their a$$ in a HUGE way...there's no such thing as a free lunch.

Fuel hedging is not a stroke of genius invented by the brilliant managers at SWA. ANY company that uses energy hedges their energy costs, airlines included. BUT becaues it is a speculative venture (that means gamble) the buyer has to be in reasonable financial helth so the seller knows the buyer can make good if it doesn't go his way. After 9/11 the only airline that had the credit rating to buy hedges was...you guessed it, SWA.

Now that we know a little bit about how it works, and given that oil is now $60/barrel...lets ask ourselves who in the HELL do you think is going to sell SWA fuel hedges at $25/barrel for 2010+ ??????? Maybe YOU would....

They'd be better sex partners than the majority of our current FA's...

[QUOTE=rickair7777]OOOPS.
Now that we know a little bit about how it works, and given that oil is now $60/barrel...lets ask ourselves who in the HELL do you think is going to sell SWA fuel hedges at $25/barrel for 2010+ ??????? QUOTE]


Rickair7777
Of course SWA or (UAL, FDX Or UPS or AAL or anybody for that matter) can't buy oil at today $25/barrel........

They can however........speculate as you say or Gamble and buy oil at $65.00/barrel or $70/barrel ( just an example price, it might actually be more)..............to be deliverd in 2007 or 2008.

If oil stays at $60/barrel for the next 2 years, the hedge was a bad move because you are now paying $5 to $10/barrel more than the market price.....................but if oil goes to $85/barrel.........it was a good gamble because they will be paying $10-$15 below future market price.
If they can continually pull it off........... good on'em and good Management.

If they blow it........a senior Airline Exec will be fired and have to take his 50 million gloden parachute:mad: and the new guy will ask his employees to take a 40% pay cut,,,,,,,,,,,,,,and he will get a 75 million bonus for cutting costs.:rolleyes:

Sorry.........couldn't resist..but it is closer to truth than fiction

The european airlines are going about it the right way. Treats the regular employees like crap. Cuts cost anyway possible. But they wont mess with the pilots. Like Ryan air banned their employees from charging their cell phones at work. They cancell most flights that arnt full, have been known to refuse to make arragments for passengers that have their flight cancelled(hotel). Advertise flying into a city, but the airport is nowhere near the city( Like their frankfurt service is to a airport 100km away, or Cophenhagen Denmark service that flies into SWEDEN) Like a company cant get any cheaper than that.
Yet their 737 captains make over 100,000 pounds a year(about 200,000 US). They actualy know the worth of their pilots.

hedges are insurance. They are a relatively small expense, especially for a company with great credit and lots of cash like LUV. You still buy insurance for your house even if you don't plan on burning it down. LUV has always bought this insurance, they didn't have a crystal ball or read Nostradamus' prophecies in the Weekly World News, it just really paid off this last year. Nobody was calling them a genius for hedging their fuel 5 years ago. And yes, they probably are hedging fuel at $60, $65 and whatever else because it can always go higher. Hedging allows them to accurately predict their costs five years down the road and manage their pricing and expenses accordingly. Most airlines can barely plan for next quarter.

And one more thing about futures contracts. If you buy futures at $60 and oil drops to $50, you don't have to buy oil at $60 anyway. You let the contract expire worthless, buy oil at $50 and eat the expense of the "insurance."