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

Delta's 70% Hedged at $3.22 per Gallon

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
General Lee is curiously silent on this one..... Getting out the lube, champ?

-Looks like your "inspired management" is pulling another genius move with the tactic of trying to run AirTran out of business....

-How long do you think it would take for some Texas-based airline to come in and hand you your butt?

-Hmmm-Be careful what you wish for.
 
General Lee is curiously silent on this one..... Getting out the lube, champ?

-Looks like your "inspired management" is pulling another genius move with the tactic of trying to run AirTran out of business....

-How long do you think it would take for some Texas-based airline to come in and hand you your butt?

-Hmmm-Be careful what you wish for.

Quiet on this one you say? Not really. The beginning of the quarter was tough on all airlines, and some airlines hedged at higher oil costs than are out there today. It's a gamble. I think CAL hedged a bunch at $140 a barrel, and UAL did a bunch at $120 a barrel.

As far as tackling Airtran, we will continue to do so, and we will do our best to hurt them financially, without killing them and allowing Southwest in. That is the key, and even if Southwest somehow got in to ATL, they would NEVER be able to fly to the same amount of cities that we cover (with DCI and INTL). We now cover 70% of the passengers at the World's busiest airport. There are only so many gates, and we have most of them. ATL is building an additional INTL terminal, and we will occupy most of it---flying all over, bringing connections in. We compete with Southwest at SLC, and they really haven't added any new city pairs as of late (maybe DEN a year ago?), and their growth is flat. We added Paris, and we will add Tokyo and probably Amsterdam soon. Those planes will bring even more people into SLC and onward on our connections. We will be the largest and best airline in the World soon. You are starting to tire me and bore me. Bye now.


Bye Bye--General Lee
 
Old School,

You need to also look at the refining costs, the so called "crack spread." Jet fuel has not come down like other crude oil products.

However, based on this chart, your concerns are well placed. Delta is underwater on their hedges:

http://www.iata.org/whatwedo/economics/fuel_monitor/price_analysis.htm

Delta is not necessarily hedging the market as an investor, per se'. They are trying to get an accurate predictor for costs, so they can build their pricing and revenue models for business going forward. This is not to infer that they will not bend to competitive pressures and they have stated their uncertainty about 2009. But for the next six months they have to have a game plan.

Just to throw some facts out there:

Actually, according to the deptartment of Energy, the average spot price for Kerosene type jet fuel has come down from an avg around $3.40/gallon in Apr 2008 to last Thursdays avg spot price of $2.45/gal.

You are correct that DAL is not hedging fuel as an investor, or more correctly as a speculator. Any "good" business that uses a large amount of commoditys such as fuel must hedge in order to reduce risk and limit exposure to price flucuations (same rule applies to foreign currency exchange rates). It shouldn't be viewed as a profit center.

Take care
 
Just to throw some facts out there:

Actually, according to the deptartment of Energy, the average spot price for Kerosene type jet fuel has come down from an avg around $3.40/gallon in Apr 2008 to last Thursdays avg spot price of $2.45/gal.

You are correct that DAL is not hedging fuel as an investor, or more correctly as a speculator. Any "good" business that uses a large amount of commoditys such as fuel must hedge in order to reduce risk and limit exposure to price flucuations (same rule applies to foreign currency exchange rates). It shouldn't be viewed as a profit center.

Take care

Edge at 3.40 vs spot price at 2.45 it won't be viewed as a profit center that for sure!
 
Quiet on this one you say? Not really. The beginning of the quarter was tough on all airlines, and some airlines hedged at higher oil costs than are out there today. It's a gamble. I think CAL hedged a bunch at $140 a barrel, and UAL did a bunch at $120 a barrel.

As far as tackling Airtran, we will continue to do so, and we will do our best to hurt them financially, without killing them and allowing Southwest in. That is the key, and even if Southwest somehow got in to ATL, they would NEVER be able to fly to the same amount of cities that we cover (with DCI and INTL). We now cover 70% of the passengers at the World's busiest airport. There are only so many gates, and we have most of them. ATL is building an additional INTL terminal, and we will occupy most of it---flying all over, bringing connections in. We compete with Southwest at SLC, and they really haven't added any new city pairs as of late (maybe DEN a year ago?), and their growth is flat. We added Paris, and we will add Tokyo and probably Amsterdam soon. Those planes will bring even more people into SLC and onward on our connections. We will be the largest and best airline in the World soon. You are starting to tire me and bore me. Bye now.


Bye Bye--General Lee

11,730 Posts later, most have not embraced your message
Any chance you could find another
venue to express your superiority complex.
 
Quiet on this one you say? Not really. The beginning of the quarter was tough on all airlines, and some airlines hedged at higher oil costs than are out there today. It's a gamble. I think CAL hedged a bunch at $140 a barrel, and UAL did a bunch at $120 a barrel.

As far as tackling Airtran, we will continue to do so, and we will do our best to hurt them financially, without killing them and allowing Southwest in. That is the key, and even if Southwest somehow got in to ATL, they would NEVER be able to fly to the same amount of cities that we cover (with DCI and INTL). We now cover 70% of the passengers at the World's busiest airport. There are only so many gates, and we have most of them. ATL is building an additional INTL terminal, and we will occupy most of it---flying all over, bringing connections in. We compete with Southwest at SLC, and they really haven't added any new city pairs as of late (maybe DEN a year ago?), and their growth is flat. We added Paris, and we will add Tokyo and probably Amsterdam soon. Those planes will bring even more people into SLC and onward on our connections. We will be the largest and best airline in the World soon. You are starting to tire me and bore me. Bye now.


Bye Bye--General Lee
I would probably be tired and bored as well, if I were you, General...... Just put the sippy-cup you have been swilling Kool-Aid from back in the pantry, now..... Play time is over-you need some nite-nite time, now.
When SWA comes in and completely kicks your butt, and when the Eurpoean routes that DAL has invested so much in fail, just get back to me...... Tough times ahead for everyone, but especially for those who don't remember the lessons of the first DAL near-BK (as you like to call it.) In the early 90s, DAL totally over-extended into Europe, and when the boys across the pond had a recession, (by today's standard a mere sniffle-compared to the current crash-cart situation) DAL ate it hard.
So here's to you-Gen. You keep right on believeing that crap, but you really should be worried. DAL has played this game before, and was lucky to survive. Back then, SWA was not a threat-but with AirTran weakened or out of business , you will really have some problems to deal with, and much worse than who has more flight to CAK.

Good Luck-you will need it!
 
so since nobody has answered the original question with any information . . .

if they hedged at $3.22 jet fuel per gallon - there are 42 gallons in a barrel - so they hedged at $135.24.

Whoops.
 
so since nobody has answered the original question with any information . . .

if they hedged at $3.22 jet fuel per gallon - there are 42 gallons in a barrel - so they hedged at $135.24.

Whoops.

No. Seems like I remember reading it was about $111 a barrel.
 

Latest resources

Back
Top