Fuel risk is hedged by air carriers?
 

Investment bank Goldman Sachs said the possibility of $150-$200 a barrel over the next six-to-24 months was "increasingly likely." The bank was one of the first to point to a triple-digit oil price more than two years ago.

Oil at $200 a barrel would mean roughly $6.50 a gallon for U.S. gasoline, according to figures from Standard Life. It makes the record $3.61 U.S. consumers are now paying seem cheap.

"I think we've reached the point now where we're starting to see significant responses from consumers," said Jim Hamilton, professor at the University of California in San Diego, adding oil prices were one of the factors that placed the U.S. economy at the risk of recession. Higher oil prices on a multi-year view remain a hit to corporate margins. Among the first to suffer are airlines, some of which are facing bankruptcy because of higher fuel costs."

Which airline would be hardest hit?


Most airlines hedge their fuel risk with fuel futures.

There exists an 'air group', (take a wild guess on who that might be), that supplies its respective code share partners with fully crewed and maintained aircraft, but does not pay for fuel.
In a normal economy this is a brilliant strategy. However, with fuel being the most unstable risk factor today, the smart move, is to shed the most non essential load. In corporate terms, what is not company property, would get load shed first. This is exactly what Delta did, and by the time oil hits $200 per bbl., do you think that this type of Load shedding of sub-contractors will become more likely?

Anyone have thoughts on the government subsidizing fuel for the airline industry?

Basically every regional passes fuel costs on to its codeshares.

Not a chance. The "genius" at work in DC would say something like.....Big Oil needs to pay for airline oil due to their unfair profits. Which would mean we would get higer oil prices.

doubt it..............and certainly not during this administration.

While subsidizing fuel for the airlines would be a great boost to the airlines, it wold be horrible for the country. where is the money going to come from? we are already running record deficits under this administration which inhereted a surplus and we are talking about further cutting taxes to help the economy in the short term. Great lets all mortgage the future to save the current.

how bout the airlines just charge more...charge what an airline ticket should cost

Bingo!

Exactly,

Increase for fuel increases and a cost of living increase for payroll.

Sure, some will flock to the LCCs.

Do you think they have the seat capacity for all of the flying public?

With regard to 'load shedding of non essential systems',
if Delta can do it, why can't US Air and United do the same with regard to a particular air group? The time is ripe to do them in!! Especially,........... If it is warranted!!!

http://www.abc15.com/news/local/stor...b-58ead663d71a

Do you have a tingling in your lower parts for Mesa? Everything you post has to do with them. Also, if you didnt know that the regionals have thier fuel paid for by their codeshare partners what are you doing posting on a subject you seem to have no knowledge of?