Jet Fuel Subsidy

[lowecur]

Seems to me the Feds could offer the airlines temporary help on the cost per gallon.

Afterall, with prices per gallon hovering around $4. to $5. in the European Union, I'm guessing a good portion of the fuel tax is not passed on to the airlines over there.

 

[Midnight Mike]

No, this is a business problem and the airlines need to take care of the problem themself.

 

[SWA GUY]

Lowecur,


The FEDs could help out the airlines with the price of jet fuel??? How is the FAA going to do that when they have no access to the price of crude, gasoline or futures? Magic wand maybe?

In order to get the price of jet fuel down we need to get the price of crude down. The only way we are going to get the price of crude under control is to tap the ANWR, offshore California oil reserves, California inland reserves, and last but most importantly get the EPA to relax their restrictions so that we can build a refinery or two.

The Saudi's are trying to help by bumping up production, but OPEC is not going along with the plan. Problem is the bump in production will not be seen until mid July which is when the motor fuel (gasoline) season will be winding down. Normally shortly after motor fuel season winds down we see a dip in the crude prices anyway. Post travel season but pre home heating oil season.

If you think the federal tax on fuel is high at .38c per gallon in the US is high, go look at the tax per litre in Europe. That's one of the reasons their fuel is $6 litre.

In case you didn't know, and many folks don't know, jet fuel is not traded on the Mercantile Exchange as crude and gasoline are. When airlines hedge fuel, they are buying crude and/or gasoline futures. The bet is that they can lock in a lower price on gas/crude and sell those futures at a profit to offset the increased prices of jet A.

Hope this all helps with the big picture,

HC

 

[lowecur]

Lowecur,The FEDs could help out the airlines with the price of jet fuel??? How is the FAA going to do that when they have no access to the price of crude, gasoline or futures? Magic wand maybe?

If you think the federal tax on fuel is high at .38c per gallon in the US is high, go look at the tax per litre in Europe. That's one of the reasons their fuel is $6 litre.

In case you didn't know, and many folks don't know, jet fuel is not traded on the Mercantile Exchange as crude and gasoline are. When airlines hedge fuel, they are buying crude and/or gasoline futures.

I was interested in what an international carrier pays for fuel in Europe. I'm sure it's not $6. per litre. My guess was that most of the tax is waived, otherwise the international flights wouldn't be cost effective.

I know that hedging is "trading futures." Don't you remember my post?

 

[T-Bags]

"I was interested in what an international carrier pays for fuel in Europe. I'm sure it's not $6. per litre. My guess was that most of the tax is waived, otherwise the international flights wouldn't be cost effective"

It's not. Fuel is SIGNIFICANTLY cheaper in Europe. Around the US, places like CA, UT, and CO have fuel prices up to 40 cents more a gallon than in TX. Taxing airline fuel is free money to the states and the stupid consumer will just blame the airline for "price gouging". If CO for instance, was smart, they'd get rid of the tax on jet fuel. Then MAYBE UAL would be willing to load up with high test for the trip to FRA. But tax revenue trumps job creation, especially when you can blame others... In any case, lower/ no state fuel tax would likely result in in US airlines being able to better compete for passenger traffic that currently merely overflies (ie EU-SA). This is an issue ALL US pilots should be together behind, the abolition of state taxes on Jet fuel.

 

[T-Bags]

"If you think the federal tax on fuel is high at .38c per gallon in the US is high, go look at the tax per litre in Europe. That's one of the reasons their fuel is $6 litre."

Actually, a little over a $1.20 a litre in Frankfurt

"In order to get the price of jet fuel down we need to get the price of crude down. The only way we are going to get the price of crude under control is to tap the ANWR, offshore California oil reserves, California inland reserves, and last but most importantly get the EPA to relax their restrictions so that we can build a refinery or two."

True, the last refinery built in the US was in 1979, in Gary Indiana

 

[General Lee]

The ATA is trying to push something in Congress that states that whenever gas goes above $30 a barrel, the strategic reserves are put on hold--unless a national emergency dictates otherwise. I think that is a good plan. We also need to have more refineries built, but I just used up my last $5 billion......

Bye Bye--General Lee

 

[SWA GUY]

T-Bags,

Thanks for setting me straight, I was doin the gazzintas in my heed again and got wrapped around the axle in the mean time. let's see one litre is about 2.4 gallons or so, so about $3.25 per gallon in Germany. Hey! That's **CENSORED****CENSORED****CENSORED****CENSORED** near what we're paying here right now. Oh well I guess they're used to it. But, they do have much higher taxes on fuel there.

General Lee,

If you could loan me 1.5 Billion I can have you a really sweet refinery built. I'd even give you 10 cents a gallon discount. No volume sales though.

HC

 

[T-Bags]

"let's see one litre is about 2.4 gallons or so, so about $3.25 per gallon in Germany. Hey! That's **CENSORED****CENSORED****CENSORED****CENSORED** near what we're paying here right now."

Actually, that's approx 3.8 litres a gallon. Last I saw gas was around 1.05 euro per gallon. current exchange rate is $1.20 per Euro, so at the time approx $4.80 per gallon. That was before the most recent run-up in oil, so I'd bet they are just north of $5 per gallon.

 

[SWA GUY]

Thanks T-Bags, as you can see I'm still wrapped, must be the lack of sleep.

That ATA plan suggesting the diversion of the SPR is never gonna happen.

HC

 

[DenverDude2002]

Around the US, places like CA, UT, and CO have fuel prices up to 40 cents more a gallon than in TX.

We do ?

Guess its a good thing Im moving to Texas then