Oil over $108 / Barrel

[Full of LUV]

Now that oil has topped $108 / Barrel, what effect is this gonna have on the industry? Good thing those profit sharing checks have cleared!!!

Hope this is a blip, but going from $80 to $108 in less than a month probably isn't in anyone's business plan.....

Best of luck to the industry in 2011.

 

[On Your Six]

How are you guys hedged? I read that Delta is hedged 40% and 40% of that amount is at about $80 a barrel, which apparently the best in the industry. Still, if oil stays this high for long, I can see a lot more RJs being parked, and maybe the DC9s even faster. Crazy times.

OYS

 

[shagadelic]

We are not hedged well. I hope we shelve this crazy merger stuff and give up the $39 million chump change.

 

[vikesfanIV]

We are not hedged well. I hope we shelve this crazy merger stuff and give up the $39 million chump change.

Really? Based on what do you feel that way? I would agree we aren't hedged as well as in the "old" days, but certainly I would think we are hedged much better than the legacy carriers right now.

Here are the actual #'s from the latest earnings release for Full Year 2011.

Percent of estimated fuel consumption covered by fuel derivative contracts:

Average Crude Oil Price per Barrel
Up to $90: 64%
$90 to $95: 33%
$95-$105: 15%
Above $105: 39%

Our only weak spot really is if oil sits in the $95-$105 range for the entire year where we only have approx 15% protection. But, anything below $90 we are sitting pretty at 64%, and if oil really skyrockets above $105 we at least have 39% hedged which should significantly cushion us against the competition.

As always we have layered protection reaching out 3-4 years. The earnings release didn't have price/barrel #'s and I haven't taken the time to look them up in the 10-k.

2012: 60%
2013: 50%
2014: 45%

 

[SERPICO]

Now that oil has topped $108 / Barrel, what effect is this gonna have on the industry? Good thing those profit sharing checks have cleared!!!

Hope this is a blip, but going from $80 to $108 in less than a month probably isn't in anyone's business plan.....

Best of luck to the industry in 2011.

Brent crude always trades a little higher. Still, sweet crude at around $98 is an unwelcome surprise.
Its been great watching all the recent media footage from the last couple of years seeing our leaders of democracy giving Qadaffi a warm reception.

 

[GuppyWN]

I can see oil over $100 being problematic.

Gup

 

[texman]

Talk to LW in OCT. She said we look good for the future. No worries. The people I worry about is F9.

 

[jonjuan]

Talk to LW in OCT. She said we look good for the future. No worries. The people I worry about is F9.

I'd worry about VX as well with oil cranking up and $39 fares being pushed against AA and UAL. Looks like they may be still born.

 

[texman]

I'd worry about VX as well with oil cranking up and $39 fares being pushed against AA and UAL. Looks like they may be still born.

What do you mean? VX doing good or bad?

 

[LoveGun]

I'd worry about VX as well with oil cranking up and $39 fares being pushed against AA and UAL. Looks like they may be still born.

VX is hedged at $80 a barrel. How are AA and UAL hedged?

 

[maxblast72]

Talk to LW in OCT. She said we look good for the future. No worries. The people I worry about is F9.

Bingo, another 6-9 month spike in oil would probably be the death of Frontier. Southwest won't need to raise ticket prices in Denver since they can cross-subsidize from the rest of their network. Frontier can't do that. My guess is if we get a 3 handle on Jet-A prices for the majority of 2011 (we are already in the $2.80-$2.90 range right now), Republic is filing bankruptcy by the end of the year. At the end of Q3, Republic had less than $200 million in unrestricted cash. Tomorrow Republic announces their Q4 and full year 2010 results. Should be interesting to hear the Bedford spin.

 

[Stifler's Mom]

Maybe this will be a short-term problem due to the unrest in the Middle East. Libya supposedly has the largest reserve of sweet crude in Northern Africa. Maybe the people of Libya can topple Gadhafi and some stability will return to the area.

Long-term...GOOD, Short-term....ROUGH

 

[Baronman]

Maybe this will be a short-term problem due to the unrest in the Middle East. Libya supposedly has the largest reserve of sweet crude in Northern Africa. Maybe the people of Libya can topple Gadhafi and some stability will return to the area.

Long-term...GOOD, Short-term....ROUGH

Love him or hate him, Gadaffi is stability. The best financial outcome (for us) would be him retaining power and squashing the uprising (albeit horrible for his people). A new regime/civil war would mean prolonged uncertainty and higher oil prices. My understanding is the majority of the oil fields are in rebel territory while he maintains a stronghold in Tripoli.

 

[texman]

Bingo, another 6-9 month spike in oil would probably be the death of Frontier. Southwest won't need to raise ticket prices in Denver since they can cross-subsidize from the rest of their network. Frontier can't do that. My guess is if we get a 3 handle on Jet-A prices for the majority of 2011 (we are already in the $2.80-$2.90 range right now), Republic is filing bankruptcy by the end of the year. At the end of Q3, Republic had less than $200 million in unrestricted cash. Tomorrow Republic announces their Q4 and full year 2010 results. Should be interesting to hear the Bedford spin.

Saw a 717 in den the other day. How is the performance during the summer in den?

 

[go!ng for broke]

Love him or hate him, Gadaffi is stability. The best financial outcome (for us) would be him retaining power and squashing the uprising (albeit horrible for his people). A new regime/civil war would mean prolonged uncertainty and higher oil prices. My understanding is the majority of the oil fields are in rebel territory while he maintains a stronghold in Tripoli.

And Weapons of Mass Disinformation there too...

 

[scoreboardII]

Nobody is going to fold, Presidential will come to the rescue and offer cheap fuel to bankrupt carriers cause "let me be clear, it's the right thing to do, it's fair".

 

[On Your Six]

Really? Based on what do you feel that way? I would agree we aren't hedged as well as in the "old" days, but certainly I would think we are hedged much better than the legacy carriers right now.

Here are the actual #'s from the latest earnings release for Full Year 2011.

Percent of estimated fuel consumption covered by fuel derivative contracts:

Average Crude Oil Price per Barrel
Up to $90: 64%

$90 to $95: 33%
$95-$105: 15%
Above $105: 39%

Our only weak spot really is if oil sits in the $95-$105 range for the entire year where we only have approx 15% protection. But, anything below $90 we are sitting pretty at 64%, and if oil really skyrockets above $105 we at least have 39% hedged which should significantly cushion us against the
competition.

As always we have layered protection reaching out 3-4 years. The earnings release didn't have price/barrel #'s and I haven't taken the time to look them up in the 10-k.

2012: 60%
2013: 50%
2014: 45%

How is Airtran, your merger partner, hedged? If they aren't protected at all, that could affect you too.


OYS

 

[BoilerUP]

This moment, CNBC shows Light Sweet Crude trading up about 6% @ $91.27/bbl.

 

[Empennage]

How is Airtran, your merger partner, hedged? If they aren't protected at all, that could affect you too.


OYS

Merger?

 

[Flyer1015]

Love him or hate him, Gadaffi is stability. The best financial outcome (for us) would be him retaining power and squashing the uprising (albeit horrible for his people). A new regime/civil war would mean prolonged uncertainty and higher oil prices. My understanding is the majority of the oil fields are in rebel territory while he maintains a stronghold in Tripoli.

Gadhafi is a monster to his people. Yet you want him to remain in power so the oil markets remain stable, the best "financial outcome" for us. Amazing. He just threatened his own people that those who will not stop protesting will be executed. Well, here's some news for you. Peoples' free will cannot be oppressed forever. They may deal with it or put up with it for months, years, decades, maybe even centuries. But at some point, a line will be drawn when enough is enough. It has started now. These oppressive tyrants will be forced out, slowly. Dictatorships, especially with tyrants, is not a good form of government. So what if a new regime means uncertainty and higher oil prices for us? Get used to, we've riden the gravy train for too long. Paying 3 bucks per gallon is cheap compared to the rest of the world. I say let the price go up. There is no reason why ANYONE should be driving a SUV/car that consumes less than 20 miles/gallon. Oil is a natural limited resource, and we should be investing heavily in other sources for cars. Anyway, I look forward to the people of Libya uniting together and fighting it all out against their tyrant, oppressive government dictator. Let freedom ring. We got ours, seems others are now following suit. In the long run, less Islamic dictators is better for everyone.


You think Egypt or Libya is bad? Just wait until this revolution/uprising comes into Saudi Arabia. The Saudi royal family is viewed by its citizens as nothing more than puppets for the American government, in cahoots with them. Wait until it spreads there, and watch the price of oil shoot up even more.