Artsyman From United States of America, joined Feb 2001, 4745 posts, RR: 36 Reply 4, posted (9 years 6 months 3 weeks 4 days 17 hours ago) and read 2384 times:
Fuel is at a ridiculous price. If you follow all the world meters, and relate them all to each other, then airline fuel should be about 58 cents. Continental thought that due to war etc, that fuel prices would average around 68 cents for the year, and thus predicted on that level, they would reach profitability for the year. Well, today the price of jet fuel hit 1.14. It is way over priced, and it is hurting all airlines worldwide. Qantas, and a few others just hiked fares / fees also. Thus far, quite a few of the majors in the US have matched the hike.
The European carriers have a slight advantage over the US carriers in regards to fuel due to the fact that jetfuel and oil in general is priced in US dollars, and the US dollar is currently very weak against the Euro/Pound thus the European carriers are paying a lot less for fuel than the American carriers.
Cba From United States of America, joined Jul 2000, 4530 posts, RR: 3 Reply 5, posted (9 years 6 months 3 weeks 4 days 16 hours ago) and read 2350 times:
Yeah, fuel surcharges are a bitch, but it's either that or the airline ceases to be profitable. Many of the airlines are currently doing poorly, and although CO is breaking even, they still need to be cautious.
AirframeAS From United States of America, joined Feb 2004, 14150 posts, RR: 25 Reply 6, posted (9 years 6 months 3 weeks 4 days 12 hours ago) and read 2283 times:
Ok let me ask.......
Since I ALREADY purchased my ticket for flying to SEA this upcoming Christmas season, will UA charge me for a fuel tax when I check in at the gate even though I paid for my ticket before the fuel crisis started? Can airlines charge people the fuel tax at time of check-in even though the reservation was made and purchased before March 2004?
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Dutchjet From Netherlands, joined Oct 2000, 7864 posts, RR: 58 Reply 10, posted (9 years 6 months 3 weeks 4 days 6 hours ago) and read 2225 times:
CO is doing the right thing by putting this modest increase through, the fuel costs have become a big problem for the airlines and yeilds, in general, are still not what they should be. The modest increase will not add more than 10% to the fare, and in most cases a lot less.
The price of filling up your car has just about doubled in the past year or so, so a +/- 10% increase in air fares is to be expected. CO has been trying to get a fare increase through for several months but could not due to actions by other airlines.
Sometimes we forget that air travel must be realistically priced if airlines are to stay in business.
Realistically I don't believe that even CO thinks the increase will actually stick, but to be responsible to its employees, it must try to take some action on the revenue side before going back to them for concessions and possibly staff reductions.
The problem with US domestic airline pricing is that it is that air travel is a commodity for the most part and if any one major airline decides not to take the fare increase across the board on all fares, it will inevitably fall apart. This is why you see these fare increase press releases on a near monthly basis. They help carriers to clarify their intent (i.e., that a specific carrier is "in" on the increase).
Ybacpa From United States of America, joined Feb 2001, 1108 posts, RR: 1 Reply 12, posted (9 years 6 months 3 weeks 4 days 6 hours ago) and read 2191 times:
Gee, isn't CO hedged
Yes, CO and most other airlines have fuel hedges. However, the ability to obtain fuel hedges is directly tied to a company's financial health, and with the situation most of the airlines are in energy suppliers aren't inclined to take on very much exposure to them. Ironically this is somewhat of a chicken-and-egg situation, since not allowing airlines to hedge could also drive them into bankruptcy.
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Artsyman From United States of America, joined Feb 2001, 4745 posts, RR: 36 Reply 13, posted (9 years 6 months 3 weeks 4 days 4 hours ago) and read 2153 times:
Gee, isn't CO hedged
Sure, they are hedged, but they are still hedged at a high amount as fuel prices have not been reasonable for ages. Airlines gamble on fuel prices all the time purchasing large amounts or rights in advance, but usually only 60 months to a year in advance. Fuel has been high for long enough that getting fuel at a low rate is just not possible.
People seem to assume that hedging means that all of a sudden fuel is cut in half or something..., we are really talking little change these days.