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The really frightening part about this is that the latest spike in crude oil prices (like last week's jump of $10.00 per barrel in a day) hasn't been figured into gas and jet fuel prices yet.

Jet-A prices (as well as gas prices) will probably settle in at $5.00 a gallon by mid summer. This will most likely force a few more air carriers into bankruptcy or to drastically cut service and raise prices.

If Israel attacks Iran anytime in the next six months, it will be over for most airlines. Crude oil prices will easily double from where they are now, and the airlines (who are spending 75% of each ticket on fuel costs) will cease to exist. You can't operate an airline when it cost 100% your gross revenue to pay for fuel.


There is an old joke:

What is the fastest way to become a Millionaire?
Invest a Billion in an airline.


What a disaster.


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Yep... I'm still amazed how some people will have no issue paying a taxi $20-30 bucks to go a few short miles and yet expect to pay $100 bucks to go 1200 miles by plane.

The mentality of the public when it comes to airlines and flying is so out of touch.

For example, the other day I was talking with a passenger that was irate that he was delayed because the inbound aircraft was being inspected because of a bird strike. He wanted to be compensated for his time. I asked him if he was driving his car and a bird went through his window would he expect the car manufacturer to pay for his loss of time and repair cost. Mmm, well he had the look of the deer in the headlights. Even acts of GOD and nature are the airlines fault evidently.

The country still needs to have air travel but they are going to have to adjust their expectation big time.
 

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The airlines should be hedging their fuel positions. Southwest does and they are still profitable and have been through all the ups and downs/bankruptcies/etc. of all the other airlines. I hate to say it folks, but they create their own issues.
 

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The airlines should be hedging their fuel positions. Southwest does and they are still profitable and have been through all the ups and downs/bankruptcies/etc. of all the other airlines. I hate to say it folks, but they create their own issues.
I don't mean to be harsh but you really have very little understanding of the whole picture if you think you have uncovered some magic bullet with that. All airlines hedge although not as aggressive as Southwest. It's like a portfolio you want to diversify. Hedging is a gamble and most airlines did 30% hedge. Hedges can be wrong and are at risk as well. If you have all airlines doing 100% hedges with such an unpredicatable oil market you can have an equally bad situation of paying to much and losing millions more then you need to.

Like I said SW got lucky but they risked big time.. they won this round but their hedges are up soon again..how many times can you go "all in" before you get tagged. Now when they hedge it will be at current prices and that will still cause a major price correction in ticket prices. The free ride is over for passengers in terms of much to unrealistic travel costs. Just look at all the business that are charging fuel surcharges. It doesnt take a rocket scientist to know whats needing to be done with airlines... and I'll tell you it ain't gambling on fuel hedges.

Hedging is not the core long term correction that needs to happen by any means it's just one of the tools in the tool box.
 

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I'm afraid the days of $59 fares are over.

Small regional carriers came in and slashed fares. Larger legacy carriers had to follow suit to compete. It drove prices down, revenue down and service down. But now the smaller carriers are dropping like flies and the big carriers are cutting flights and staffs.

I remember flights from LAX to JFK for $199. I never understood how the airlines could turn a profit at that price point.

Airfares are going to have to go back up to where they were 10 - 15 years ago. Just a sad fact of life.


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I remember flights from LAX to JFK for $199. I never understood how the airlines could turn a profit at that price point.
They never did. It was less of a loss to sell empty seats for $.10 on a $1, but sadly that became the MO of ticket buyers, and anything over $199 was a ripoff.
Flash G said:
Airfares are going to have to go back up to where they were 10 - 15 years ago. Just a sad fact of life.
Good. Means I'll get paid more (hopefully :panic:) when I start flying for an airline.

skelliott2 said:
The airlines should be hedging their fuel positions. Southwest does and they are still profitable and have been through all the ups and downs/bankruptcies/etc. of all the other airlines. I hate to say it folks, but they create their own issues.
That's a very over simplified and inaccurate conclusion. :thwack::shrug:
 
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