Crude At $96.10

[enuffalready]

Anyone care to speculate how long any of these airlines are hedged? With crude going up 50% since march... hard to believe that this isn't really hurting a lot of these companies. What are the long term plans at $100-$110 or more

 

[John Pennekamp]

What are the long term plans at $100-$110 or more

UAL:
Save fuel or return to bankruptcy!
Pay cuts or return to bankruptcy!
Merger or return to bankruptcy!

 

[~~~^~~~]

enuff - the price per barrell is only part of the equation. The other is part is the spread between crude oil and jet fuel which is also at historical highs. A weak hurricane season should help there.

Much of what we see has to do with the devaluation of the dollar. There is a reason why airlines in China, India and other "poor" countries are not having problems with oil prices. In their currency, the price of oil is not increasing nearly as rapidly as it is here in the US.

I'm astonished by the performance of my Asian investments (check out JAOSX) until I correct for the deflation of our currency. Heck, we have lost 10% to the Philippine Peso and they are nearly in civil war.

The US based international carriers likely benefit from this deflationary pressures which reduce their costs for labor, leases and any other business they have locked into dollars, to a point.

When the British Pound Sterling lost it's status as the World standard of value, the currency dropped around half of its value. The Dollar is losing its status fast.

While the rest of the World has been getting its act together economically, we have been adrift thanks to an Administration which sees America as a "war economy." We went from a government budget surplus to deficits, when we need to be preparing for the Baby Boom retiree's hitting the budget. We also have a Vice President who is quoted to have said "deficits don't matter."

In order to prop up the market, Bernake keeps lowering interest rates, the government keeps pumping out dollars with nothing to back them and like anything else where supply exceeds demand devaluation occurrs. Big inflation will probably hit as soon as the Asian sources of cheap goods just can not get any cheaper.

I'm not a Gold nut, but I see their logic.

 

[~~~^~~~]

UAL:
Save fuel or return to bankruptcy!
Pay cuts or return to bankruptcy!
Merger or return to bankruptcy!

Well of course. Look how much money management made in bankruptcy. Even now, they are looking for a deal. Always wanting to deal, while their own jobs have been outsourced to McKinsey consultants who don't know how (and don't particularly care about) running an airline.

I think this reflects on the Ace that Southwest has yet to play. United, by the gift of timing and market forces is finally in a position to reap some rewards for their operation - yet all management wants to do is deal. Southwest on the other hand has managers that like running the airline and who do not spend a second of their day thinking about how they could sell, or bankrupt, the airline to enrich themselves personally.