afterburn81

Just wanted to start a discussion on how people feel about the fuel prices going up again and how that may affect the projected growth and hiring at the Legacy's and Major airlines. Obviously if the majors don't hire, then the regionals don't hire.

I know when the fuel prices spiked last time, everyone started parking planes and furloughing. I have a pretty bad feeling that fuel prices are going up for good and won't be coming down to the $70 per barrel that our current system is designed to operate efficiently on. Crude is approaching the $100 mark pretty quickly.

Who has hedged? How long does the hedging last?

captscott26

remember what 2008 looked like? Well, scractch of the 08 and insert whatever year you like. That is what the airline industry will look like with 140+ oil.

Any other questions?

f16jetmech

Everyone, quickly panic and jump to massive conclusions!!!!!!!!

BlueMoon

Break out the mat

rickair7777

It's not jumping to conclusions, it's merely stating what is blatantly obvious.

I think the airlines are lean enough to deal with $100 oil, but after that it's going to get tough.

Not only is fuel the airline's largest operating cost (used to be labor), above $100 the economy starts to suffer, which further exacerbates the problem, since airline business is always linked to the economy. A lot of flying is discretionary, both personal and business...

Problems in the middle east always boost oil prices, but that should be temporary. However eventually the day will come when demand really does outstrip production and then things will get ugly (assuming we have not proactively migrated to alternative energy sources).

FLowpayFO

Bio fuel here we come!

goodyear859

Saudi Arabia Uprising Could Mean $140-Plus Oil

News Headlines

Bill Lumberg

This is not a supply and demand situation. Our supply in the US is pretty darn good. This is all speculation on what COULD happen in the Middle East. Yes, things could get worse, or they very likely will calm down after Libya and a couple others get through their problems. Does Saudi Arabia look like they could have a problem? Not yet. They will probably throw cash at the problem, since they are making a heck of a lot more right now. They will pay off their people, and that will be that. When this does calm down, oil prices will decrease, but with the start of the Summer season coming up, oil will probably hover around $90-100 a barrel until September. What will airlines do? They will add fuel surcharges. People will still travel. If oil is way up in September, then you could see some major parkings of fleets.

iPilot

The airlines are way different today than they were in '08. For one they have greatly reduced capacity that will allow them to maintain a price premium for tickets. Secondly, they now make their money on ancillary fees such as bags and food. All of which can pass the costs of fuel much better than simply competing on ticket price.

Also, the airlines are on a level playing field, they all have much similar costs and fuel hedging so you won't see one airline having a big advantage over the others.

Not saying it won't be bad seeing $140/bbl oil but I just don't see it as the airline apocalypse we all were expecting in '08.

captscott26

Who is panicking? How am I jumping to conclusions? The op asked a what if question, and I answered it. I'm not saying it's gonna happen, I just know what it will look like if if does. Been there, done that, got the furlough letter to prove it.