Oil future at $131.57
05-23-2008, 11:00 PM
#1
Gets Weekends Off
Thread Starter
Joined APC: Jul 2007
Position: CR7
Posts: 267
Oil future at $131.57
How long will UAL, DL, CAL and other big airlines be able to operate with Oil above $130? They must be bleeding like crazy.
All the contracts with Regionals (not paying for fuel) that do not change not matter how high the oil price gets must hurt and must soon be impossible to maintain.
The situation is getting worse every day. Maybe we (junior guys at the regionals most of all) should be glad if we are lucky to have a job in a few months from now. Right now the picture is dark and it is difficult to find ideas or anything that would solve and give hope.
It is also funny how the press jumped all over AA because they are trying to compensate for the Oil price and said they would start charging extra fees for the bags. Many journalist started immediately complaining against airlines raising fees and/or prices. What do they expect? How are the airlines supposed to cover the increased gas/oil cost?
I heard a while ago that if we consider the dollar devaluation and the inflation we have the same ticket prices for flying as we had in 1978 while the cost of gas is hundreds of procents higher.
We can see in every bigger airport that everybody is flying and that we do not lack passengers so we cannot do more to attract people to fly. The airport cannot (in many places) handle more people.
It is just strange that people are flying like never before and the airlines loosing money and that the journalist and public do not understand that that the prices must be way too low taking the fuel cost into considaration. They (the public) accept that it cost over $80 to fill the tank of the SUV but if the airline needs to charge more in fees and for tickets to cover fuel cost then it is immediately attacked by the press.
Actually the high Oil price must be the perfect situation for the airlines to raise the ticket prices a lot to take back what has been lost in the past years. If ticket prices would be raised by 100% and because of that we would loose 50% of the passengers then the airlines would be making at least the same amount of money than today but the pressure on airports, passenger handling, etc etc would be significally less.
Most are loosing money so the trying to "compete by selling cheaper and cheaper tickets" is not longer the "thing" now it is more.......just survive.
All the big ones are loosing millions every quarter and like AA someone has to start raising prices in every way and let the ones that wants to be "cheap" bleed to death.
The idea that the people would choose the cheaper airline and that the airline raising prices would loose passenger is not longer valid as in many cases there are no more seats at these cheaper airlines that are already flying at full capacity and loosing money.
Passengers will be in many cases just happy to get a seat at any price. If these cheap airlines that wants to keep the price low do not make money then they cannot increase amount of seats either as they cannot grow.
The higher Oil price changes all the rules of competition in the airline industry. It is not longer by increasing volume/amount of passengers that the airlines can make money. The system including the FAA can hardly handle more volume. That is at its top so now all it is left is to get more pay for the product and to in any way reduce the cost for operating and the high Oil price is the perfect excuse or explanation to raise the prices. I hope that what AA is trying is just a start and that more will follow so we get back profitable airlines. Just waiting for the Oil prices to go down again is just sitting doing nothing and the high oil prices are here to stay if noone (no goverment) stops it.
The demand of oil today comparing with 2003 is just 8% more but the price of oil 2003 was $30 and now it is over $130 that is a 400% increase. The production of oil today is higher and the reserve of oil have been corrected and are bigger today than 2003 so.................400% in higher oil price is what???
All the contracts with Regionals (not paying for fuel) that do not change not matter how high the oil price gets must hurt and must soon be impossible to maintain.
The situation is getting worse every day. Maybe we (junior guys at the regionals most of all) should be glad if we are lucky to have a job in a few months from now. Right now the picture is dark and it is difficult to find ideas or anything that would solve and give hope.
It is also funny how the press jumped all over AA because they are trying to compensate for the Oil price and said they would start charging extra fees for the bags. Many journalist started immediately complaining against airlines raising fees and/or prices. What do they expect? How are the airlines supposed to cover the increased gas/oil cost?
I heard a while ago that if we consider the dollar devaluation and the inflation we have the same ticket prices for flying as we had in 1978 while the cost of gas is hundreds of procents higher.
We can see in every bigger airport that everybody is flying and that we do not lack passengers so we cannot do more to attract people to fly. The airport cannot (in many places) handle more people.
It is just strange that people are flying like never before and the airlines loosing money and that the journalist and public do not understand that that the prices must be way too low taking the fuel cost into considaration. They (the public) accept that it cost over $80 to fill the tank of the SUV but if the airline needs to charge more in fees and for tickets to cover fuel cost then it is immediately attacked by the press.
Actually the high Oil price must be the perfect situation for the airlines to raise the ticket prices a lot to take back what has been lost in the past years. If ticket prices would be raised by 100% and because of that we would loose 50% of the passengers then the airlines would be making at least the same amount of money than today but the pressure on airports, passenger handling, etc etc would be significally less.
Most are loosing money so the trying to "compete by selling cheaper and cheaper tickets" is not longer the "thing" now it is more.......just survive.
All the big ones are loosing millions every quarter and like AA someone has to start raising prices in every way and let the ones that wants to be "cheap" bleed to death.
The idea that the people would choose the cheaper airline and that the airline raising prices would loose passenger is not longer valid as in many cases there are no more seats at these cheaper airlines that are already flying at full capacity and loosing money.
Passengers will be in many cases just happy to get a seat at any price. If these cheap airlines that wants to keep the price low do not make money then they cannot increase amount of seats either as they cannot grow.
The higher Oil price changes all the rules of competition in the airline industry. It is not longer by increasing volume/amount of passengers that the airlines can make money. The system including the FAA can hardly handle more volume. That is at its top so now all it is left is to get more pay for the product and to in any way reduce the cost for operating and the high Oil price is the perfect excuse or explanation to raise the prices. I hope that what AA is trying is just a start and that more will follow so we get back profitable airlines. Just waiting for the Oil prices to go down again is just sitting doing nothing and the high oil prices are here to stay if noone (no goverment) stops it.
The demand of oil today comparing with 2003 is just 8% more but the price of oil 2003 was $30 and now it is over $130 that is a 400% increase. The production of oil today is higher and the reserve of oil have been corrected and are bigger today than 2003 so.................400% in higher oil price is what???
Last edited by HermannGraf; 05-23-2008 at 11:38 PM.
05-23-2008, 11:28 PM
#2
Thuggin it out
Joined APC: Aug 2006
Position: Rollin' Down tha 405
Posts: 2,571
This is completely true give or take a couple bucks here and there. I love telling PAX that when they complain about ticket prices.
05-23-2008, 11:43 PM
#3
Banned
Joined APC: Feb 2006
Posts: 781
If they raise the prices they'll have trouble filling seats quick, most passenger do not care about supporting the airlines financially, they might fly once every few years. As the AA manager said in CNN regulation might be a solution for the airlines that could bring finance and quality back to the industry. The race to the bottom mentality of current airline managements hasn't helped either.
05-24-2008, 06:22 AM
#4
Gets Weekends Off
Thread Starter
Joined APC: Jul 2007
Position: CR7
Posts: 267
If they raise the prices they'll have trouble filling seats quick, most passenger do not care about supporting the airlines financially, they might fly once every few years. As the AA manager said in CNN regulation might be a solution for the airlines that could bring finance and quality back to the industry. The race to the bottom mentality of current airline managements hasn't helped either.
As for now most flights out of many places are overbooked and I see the loads almost every day being a commuter. There are so much passengers that even if we raise the prices by 100% and loose 50% of the passengers we would stil be making the same money if not more.
Your opinion that passengers will stop flying sounds like passengers are flying just because it is so cheap. I believe they are flying because they must and do not have any options as the rail/train is no so great and driving a car is not longer cheap.
Then wen the passengers get used to the price raise and they start coming back we would have capacity to handle that and more. As for now, many airports cannot take/handle more passengers and and most airlines are loosing money even if they have done everything to cut down cost and are not paying the pilots even close to what they used to. Sure it is the fuel but it does not make any sence that even if the companies fly full they do not make any money. The profit on a full domestic 757 flight today is not much not to mention other types of aircraft.
The high Oil prices are the great opportunity to make the public get used to higher ticket prices and take back the flying to a more luxury product like it was before. What we would loose in amount of pax we would gain in income and available capacity and less pressure on the whole aviation system. We have to leave the fear of "not selling seats if we raise the prices" behind and leave the "volume" thinking. Today we just have to survive and take back the ground lost during 20 years......
05-24-2008, 11:11 AM
#6
Banned
Joined APC: Feb 2006
Posts: 781
Your opinion that passengers will stop flying sounds like passengers are flying just because it is so cheap. I believe they are flying because they must and do not have any options as the rail/train is no so great and driving a car is not longer cheap.
Then wen the passengers get used to the price raise and they start coming back we would have capacity to handle that and more. As for now, many airports cannot take/handle more passengers and and most airlines are loosing money even if they have done everything to cut down cost and are not paying the pilots even close to what they used to. Sure it is the fuel but it does not make any sence that even if the companies fly full they do not make any money. The profit on a full domestic 757 flight today is not much not to mention other types of aircraft.
Herman, I'm sure you know by now that this is the business of selling a $10 product for $1 and they have been practicing this at least since 9/11. It's the business of who can long enough survive offering lowest prices with losses long enough so they might gain a market at the expense of another airline ceasing. If they raise the prices the other 39 odd airlines will lower their prices and drive you out the business untill only the strongest are left, do you see my point? The pax on the other hand, same as with driving a car if the price is too high they will find a bicycle. The business pax true, may be able to pay whatever but the rest of us in coach have no problem traveling less.
05-24-2008, 11:53 AM
#8
Gets Weekends Off
Joined APC: Apr 2008
Position: CFI in training
Posts: 160
How long will UAL, DL, CAL and other big airlines be able to operate with Oil above $130? They must be bleeding like crazy.
All the contracts with Regionals (not paying for fuel) that do not change not matter how high the oil price gets must hurt and must soon be impossible to maintain.
The situation is getting worse every day. Maybe we (junior guys at the regionals most of all) should be glad if we are lucky to have a job in a few months from now. Right now the picture is dark and it is difficult to find ideas or anything that would solve and give hope.
It is also funny how the press jumped all over AA because they are trying to compensate for the Oil price and said they would start charging extra fees for the bags. Many journalist started immediately complaining against airlines raising fees and/or prices. What do they expect? How are the airlines supposed to cover the increased gas/oil cost?
I heard a while ago that if we consider the dollar devaluation and the inflation we have the same ticket prices for flying as we had in 1978 while the cost of gas is hundreds of procents higher.
We can see in every bigger airport that everybody is flying and that we do not lack passengers so we cannot do more to attract people to fly. The airport cannot (in many places) handle more people.
It is just strange that people are flying like never before and the airlines loosing money and that the journalist and public do not understand that that the prices must be way too low taking the fuel cost into considaration. They (the public) accept that it cost over $80 to fill the tank of the SUV but if the airline needs to charge more in fees and for tickets to cover fuel cost then it is immediately attacked by the press.
Actually the high Oil price must be the perfect situation for the airlines to raise the ticket prices a lot to take back what has been lost in the past years. If ticket prices would be raised by 100% and because of that we would loose 50% of the passengers then the airlines would be making at least the same amount of money than today but the pressure on airports, passenger handling, etc etc would be significally less.
Most are loosing money so the trying to "compete by selling cheaper and cheaper tickets" is not longer the "thing" now it is more.......just survive.
All the big ones are loosing millions every quarter and like AA someone has to start raising prices in every way and let the ones that wants to be "cheap" bleed to death.
The idea that the people would choose the cheaper airline and that the airline raising prices would loose passenger is not longer valid as in many cases there are no more seats at these cheaper airlines that are already flying at full capacity and loosing money.
Passengers will be in many cases just happy to get a seat at any price. If these cheap airlines that wants to keep the price low do not make money then they cannot increase amount of seats either as they cannot grow.
The higher Oil price changes all the rules of competition in the airline industry. It is not longer by increasing volume/amount of passengers that the airlines can make money. The system including the FAA can hardly handle more volume. That is at its top so now all it is left is to get more pay for the product and to in any way reduce the cost for operating and the high Oil price is the perfect excuse or explanation to raise the prices. I hope that what AA is trying is just a start and that more will follow so we get back profitable airlines. Just waiting for the Oil prices to go down again is just sitting doing nothing and the high oil prices are here to stay if noone (no goverment) stops it.
The demand of oil today comparing with 2003 is just 8% more but the price of oil 2003 was $30 and now it is over $130 that is a 400% increase. The production of oil today is higher and the reserve of oil have been corrected and are bigger today than 2003 so.................400% in higher oil price is what???
All the contracts with Regionals (not paying for fuel) that do not change not matter how high the oil price gets must hurt and must soon be impossible to maintain.
The situation is getting worse every day. Maybe we (junior guys at the regionals most of all) should be glad if we are lucky to have a job in a few months from now. Right now the picture is dark and it is difficult to find ideas or anything that would solve and give hope.
It is also funny how the press jumped all over AA because they are trying to compensate for the Oil price and said they would start charging extra fees for the bags. Many journalist started immediately complaining against airlines raising fees and/or prices. What do they expect? How are the airlines supposed to cover the increased gas/oil cost?
I heard a while ago that if we consider the dollar devaluation and the inflation we have the same ticket prices for flying as we had in 1978 while the cost of gas is hundreds of procents higher.
We can see in every bigger airport that everybody is flying and that we do not lack passengers so we cannot do more to attract people to fly. The airport cannot (in many places) handle more people.
It is just strange that people are flying like never before and the airlines loosing money and that the journalist and public do not understand that that the prices must be way too low taking the fuel cost into considaration. They (the public) accept that it cost over $80 to fill the tank of the SUV but if the airline needs to charge more in fees and for tickets to cover fuel cost then it is immediately attacked by the press.
Actually the high Oil price must be the perfect situation for the airlines to raise the ticket prices a lot to take back what has been lost in the past years. If ticket prices would be raised by 100% and because of that we would loose 50% of the passengers then the airlines would be making at least the same amount of money than today but the pressure on airports, passenger handling, etc etc would be significally less.
Most are loosing money so the trying to "compete by selling cheaper and cheaper tickets" is not longer the "thing" now it is more.......just survive.
All the big ones are loosing millions every quarter and like AA someone has to start raising prices in every way and let the ones that wants to be "cheap" bleed to death.
The idea that the people would choose the cheaper airline and that the airline raising prices would loose passenger is not longer valid as in many cases there are no more seats at these cheaper airlines that are already flying at full capacity and loosing money.
Passengers will be in many cases just happy to get a seat at any price. If these cheap airlines that wants to keep the price low do not make money then they cannot increase amount of seats either as they cannot grow.
The higher Oil price changes all the rules of competition in the airline industry. It is not longer by increasing volume/amount of passengers that the airlines can make money. The system including the FAA can hardly handle more volume. That is at its top so now all it is left is to get more pay for the product and to in any way reduce the cost for operating and the high Oil price is the perfect excuse or explanation to raise the prices. I hope that what AA is trying is just a start and that more will follow so we get back profitable airlines. Just waiting for the Oil prices to go down again is just sitting doing nothing and the high oil prices are here to stay if noone (no goverment) stops it.
The demand of oil today comparing with 2003 is just 8% more but the price of oil 2003 was $30 and now it is over $130 that is a 400% increase. The production of oil today is higher and the reserve of oil have been corrected and are bigger today than 2003 so.................400% in higher oil price is what???
I know this is off topic, but if people could learn to type in English it would be a lot easier to understand what they are saying. Don't bite my head off, I just had to reread like 4-7 sentences 3 times just to understand what you were trying to say...
05-24-2008, 12:15 PM
#9
Gets Weekends Off
Joined APC: Apr 2006
Position: UAL 756 FO
Posts: 169
05-24-2008, 12:37 PM
#10
Line Holder
Joined APC: Jan 2008
Position: EMB FO
Posts: 38
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