Crewchief From , joined Dec 1969, posts, RR:
Reply 4, posted (6 years 10 months 5 days 11 hours ago) and read 2758 times:
It's good that oil is going down, but more important is the price point where airlines will make money again. Given the upcoming capacity and cost reductions, at what price point will airlines be profitable?
I read on another thread that FL said they would be profitable at $105/bbl + $30 refining margin. Does that equate to a quote of $105/bbl for light, sweet crude? If so, the price of oil has to drop a lot more. Also, I heard on CNBC that oil has a trading range of about +-25% or so, indicating a trading range of $125-$150.
Very interesting however it's easy to play "Monday Morning Quarterback" after a substantial increase in airline stock prices. UAL, US or any other airline could have just as easily declared BK had oil prices continued to rise.
When it comes to investing in airlines.. Robert Crandall says it best..... "And I always said to the employees of American, This is not an appropriate investment. It's a great place to work and it's a great company that does important work. But airlines are not an investment.'...."
[Edited 2008-07-23 08:28:22]
Formula 1 Grand Prix Trips: YUL '08, MEL '09, BCN '10, SIN '11, and LGW '12
Bmacleod From Canada, joined Aug 2001, 2517 posts, RR: 0
Reply 10, posted (6 years 10 months 4 days 17 hours ago) and read 2450 times:
$127 crude is quite cheaper than $145 crude but it will take some time for jet fuel to come back down.
Many commodity analysts think oil will trade at $120 for the next few months possibly down to $100 by year end. Hopefully we won't see another spike upwards. After the Beijing Olympics you will probably see a substantial drop in oil.
The long term view is that oil will remain above $100 for the next year or so and airlines will have to re-organize by merger, fleet and route cutbacks and hopefully airline CEOs will trim their super-size salaries...ya right!!!
The engine is the heart of an airplane, but the pilot is its soul.
Viscount724 From Switzerland, joined Oct 2006, 26792 posts, RR: 22
Reply 11, posted (6 years 10 months 4 days 16 hours ago) and read 2389 times:
Quoting Sxf24 (Reply 6): You may think UAUA is having a great day when its up about 60%, but it is still off well over 80% from previous levels...
You also have to keep the arithmetic in mind. If a stock price goes from $100 to $50 it's dropped by 50%, but to get back to $100 it has to increase by 100%. Or if a stock plunges from 100 to 10 it's dropped by 90%, but to get back from 10 to 100 it has to increase by 900%.