Welcome to Flightinfo.com

  • Register now and join the discussion
  • Friendliest aviation Ccmmunity on the web
  • Modern site for PC's, Phones, Tablets - no 3rd party apps required
  • Ask questions, help others, promote aviation
  • Share the passion for aviation
  • Invite everyone to Flightinfo.com and let's have fun

Spirit and fuel hedging

Welcome to Flightinfo.com

  • Register now and join the discussion
  • Modern secure site, no 3rd party apps required
  • Invite your friends
  • Share the passion of aviation
  • Friendliest aviation community on the web
Register   Log in
F

flya380

Well-known member
Joined
Feb 9, 2005
Posts
111
OK guys,

The fact is that NK has an 18 month fuel hedge (straight from Carlson's mouth, unless he's lying but I don't think so)

So shouldn't we be more comfortable than other airlines, dealing with the recent high fuel prices? Like JC said, it's not like Southwest hedges, but at least it's better than paying 130$/brl

Then somebody explain to me why Baldenza and Co are crying like babies that the fuel is killing us and that's why they have to reorganize the company?

For me it doesn't make sense. Even if not 100% of the fuel is hedged, we shouldn't have to screw with 242 pilots

Somebody???
 
OK, besides that anything constructive?

BTW, Troll, if you imply that JC is a liar, i agree but why would he lie about hedging fuel?
 
Okay, you are hedged. 1 percent at 130 a barrel. feel better.

A blanket statement "we are hedged" without more details makes the statement meaningless. They could be hedged at 135 a barrel, in which case they are losing money on the deal.

The only FACT you have is the warn letter.

Cheers
Wino
 
Seriously, do ya'll think they are that dumb not to raise ticket prices if we are losing money. Multiply the bag count times 20 bucks a bag. Most legs the bags just about cover the fuel burn. Hope some of ya'll don't get drug tested, not sure it will go well. Your on crack if you think they are not making money. Don't be surprised if all of a sudden were taking delieveries of 15+ plans next yr.
 
Hey, I like the optimism. Better than all the negativity on the company board. I heard (from one of JC's "boyz" we were 63% hedged. Fact???
 
Fuel hedging doesn't mean we pay less for gas. It means the company is making money on their short term investments in oil hedges.

Some investors have asked Southwest why they aren't distributing the fuel hedge income to the investors. Gary Kelly's answer was that Southwest would go bankrupt. So you have to ask yourself if Indigo is more concerned about taking their money or saving the company.
 
Wino said:
Okay, you are hedged. 1 percent at 130 a barrel. feel better.

A blanket statement "we are hedged" without more details makes the statement meaningless. They could be hedged at 135 a barrel, in which case they are losing money on the deal.

The only FACT you have is the warn letter.

Cheers
Wino
Click to expand...

Try $139/barrel
 
70 bags at $20 each is only $1400...let's say 3500 pounds from FLL-MCO, that is 522 pounds of Jet A in FLL they charge 3.59 a gallon $1873.98 for gas...this does not cover the gas.

Let's use FLL-PAP always lots of bags...12,000 pounds of Jet A...1791 gallons of Jet A at 3.59 a gallon...$6429.85 for gas at $20 per bag you need 320 bags to cover the fuel.
 
Mike Oxlong said:
70 bags at $20 each is only $1400...let's say 3500 pounds from FLL-MCO, that is 522 pounds of Jet A in FLL they charge 3.59 a gallon $1873.98 for gas...this does not cover the gas.

Let's use FLL-PAP always lots of bags...12,000 pounds of Jet A...1791 gallons of Jet A at 3.59 a gallon...$6429.85 for gas at $20 per bag you need 320 bags to cover the fuel.
Click to expand...

Very true because your fares at 9.00 bucks will drag you into the negative even further. Maybe that is what your 242 furloughs will cover. Freakin idiots! (mgmt that is)

:D
 
Last edited:
Well J.O., better 9$ fares as a marketing tool than keeping passengers stranded on jets for hours on end. Hope those displacements, if they happen , don't end up being to a bunch of crappy RJ's like Jet Blows. If there ever was a merger or buyout guess where you will end up on the seniority list with no union. C ya!
 
kwick said:
Well J.O., better 9$ fares as a marketing tool than keeping passengers stranded on jets for hours on end. Hope those displacements, if they happen , don't end up being to a bunch of crappy RJ's like Jet Blows. If there ever was a merger or buyout guess where you will end up on the seniority list with no union. C ya!
Click to expand...

First off jerkoff, it was a joke. Second, marketing strategies such as idiotic 9 dollar fares are costing 242 possible furloughs. Our valentine's day setback was not a marketing strategy you tool! The rest does not even warrant an answer.
 
Last edited:
Beetle007 the bag math was in response to...

Seriously, do ya'll think they are that dumb not to raise ticket prices if we are losing money. Multiply the bag count times 20 bucks a bag. Most legs the bags just about cover the fuel burn. Hope some of ya'll don't get drug tested, not sure it will go well. Your on crack if you think they are not making money. Don't be surprised if all of a sudden were taking delieveries of 15+ plans next yr.
Click to expand...

posted by critterair2
 
Mike, I do agree with the numbers that you posted. However, I don't agree with the fuel price. How much we are hedged at what price, none of us really know. I think we can all agree that with the amount of facts that we have been presented from the higher ups, the fuel prices in the paperwork are prob. not what we are paying. I THINK, everyone see that, MY OPINION, we are paying a fair amount lower /gallon. I've been wrong many times in my life, very well could be now. The main point of my last post is I cannot believe if we were blowing through the last dollars that NK has, then mgmt would keep up with the 9 dollar fares. There is alot that we complain about towards mgmt but, they are business people, THEY ARE SMARTER THAN THAT.
JBLOW, dude don't get pissed at us for smokin you guys out of FLL, don't be surprised if we end up on the same seniority list at some point. Who's buying who, we'll see......lots of $$ in TPG. Although business models don't make sense, routes do. Folks this is the time for all pilots on all list to stick together and look out for each other. ITS JUST A JOB, but it does pay the bills. When its all over its what is at home that counts.
 
Even at half price...1.79 a gallon that is still 160 bags checked at $20 just to cover the fuel.
1.79 x 1791 = 3205 / 20 = 160

It is hard to imagine that Spirit would be immune to the problems of the market today. Like I have said before, if you treat people badly enough for long enough they will stop flying Spirit and buy tickets on other airlines.
 
and 50 percent off fuel would be making the assumption that your hedging is better than southwests!


Usually, really cheap fares like the 9 dollar one are not signs of good managment, but extreme desperation.

Remember, the closer and closer Northwest got to bankruptcy, a few years back, the LESS likely they were to go along with fare increases. When you get real desperate you will take any cash for a seat that you have already committed to fly that is still empty. I would look at the 9 dollar fare as real frightening, not a sign of good management.

Fare increases are going through right now because none of the majors are actually on the brink and have enough cash to ride out short term effects of a fare increase (short term drop in loads for a longer time rise in yield) Fare sales scream "We need cash now!"


Stay away from the coolaide criterair, it rots your brain.

Cheers
Wino
 
I would look at the 9 dollar fare as real frightening, not a sign of good management.
Click to expand...

50% is way too far fetched...and I'll agree with you on poor management. Critter may have been drinking the kool-aid for sure.
 
critterair2 said:
. I think we can all agree that with the amount of facts that we have been presented from the higher ups, the fuel prices in the paperwork are prob. not what we are paying.
Click to expand...

Fuel hedging doesn't mean you pay less for fuel.

Southwest invests in heating oil. When the price of heating oil goes up they sell their investment in heating oil (just like stock). They never actually see the oil. They just buy and sell contracts for oil.

When southwest goes to the pump they pay the same as everyone else.

Here is a good research paper on fuel hedging:
http://www.kellogg.northwestern.edu/research/fimrc/papers/jet_fuel.pdf
 
Last edited:
Haven't drank the coolaid, keeping plan B well alive, just a hunch that we are better off then they want us to believe. When was the last time we were told the truth and they were'nt playing childhood games with us.
 
Wino said:
Usually, really cheap fares like the 9 dollar one are not signs of good managment, but extreme desperation.

I would look at the 9 dollar fare as real frightening, not a sign of good management.

Cheers
Wino
Click to expand...


it's not like we have a plane with 144 people paying 9 bucks a piece..

the $9 fares and multitude of other bizzare internet sales are a marketing gimmick that bodes people into navigating our confusing website in the hopes of matching up their travel plans with the particular dates and flights which there are the $9 seats

it's a lot like vegas where people keep coming back, even after getting screwed, hoping that this time they will come out ahead....

meanwhile the same bag and drink fees that were to have sent our bus station pax scrambling a year ago are now being mirrored by the legacies..

strange times we find ourselves in
 
Joblu said:
Second, marketing strategies such as idiotic 9 dollar fares are costing 242 possible furloughs.
Click to expand...

Pilots are idiots. (yes that includes me)

Marketing strategies are intended to put buts in seats at a profit. $9 fares fill seats that would otherwise remain unsold. Look at it this way, a seat sold for $9 is $9 more than you would make if you closed the door with the seat empty.

AA started "yield management" and they also have fare sales. NK uses the same strategy. So does WN. It's called chasing dollars in a down market and I for one and glad that BB found a way to get $9 more than the next guy.

You should also be happy. Jake Shore would have closed the doors long ago; BB and BB and their screwy marketing have provided the paychecks.

If you haven't noticed, the entire nation is hurting, so why do think that the airlines would be any different.

Maybe you should be supporting the "drill here, drill now" campaign instead of spouting off on the internet.
 
Dont be so sure that the 9 dollars was a net gain. Remember its weight and you got to buy fuel to haul the weight.

Using the old 10 percent rule for tankering fuel (it costs 10 percent of the fuel to carry it) a 200 lb passenger will increase your fuel burn by 20 lbs. call it 4 dollars a gallon for jet fuel at 7 lbs per gallon and it costs 12 dollars in gas to haul that 9 dollar pax.

But I guess they will make it up in volume!

Pull up a flight plan and plug in heavier weights and see what it does to your burn...

Cheers
Wino
 
It probably wasn't a net gain in that context. The $9 fare is a marketing tool.

Rather than spending thousands of dollars on billboards or newspaper ads, the $9 fare draws attention to Spirits service in a particular market.
 

Share this page

Latest posts

Latest resources

Latest media

Carbon Cub FX-3 Shenandoah Valley
Carbon Cub at Kittyhawk
FX-3 in the backcountry
IFR Panel in a Carbon Cub FX-3
Cub-Provo-UT-c.jpg
Back
Top Bottom