Leave Alaska for UAL?

[Andy]

I think UAL could be the sacrificial lamb to appease regulators in the next round of mergers. With DAL/NWA basically done, it's a virtual certainty something involving UAL is going to rear it's ugly head shortly. I don't think it's a matter of UAL's stand alone strengths, I think they just be thrown under the bus so that a few exec. teams can line their pockets with truckloads of cash.

Also, Alaska hasn't furloughed anybody since 1980. They've pissed everybody off since then but they've been kept on the payroll.

Ferlo, regulators will be concerned about lack of competition. I fail to see how the partitioning of a carrier among merged airlines would appease regulators. Carving up United would have the opposite effect.

 

[Andy]

Now call me crazy, but isn't this a good thing? Hear me out: Airlines have all basically cut costs about as far as they can, at least the controllable ones. They are having a tough time on the revenue side and fares are not capable of going much lower. They are of the mindset that they need to keep fares low to keep the planes absolutely full.
Now if we go into a global recession, one of the first effects will be a drastic reduction in the price of crude oil due to decreased demand. This has happened time and again. People will also travel less, but there are always those folks who are going to have to travel. The way I see it, a recession could actually help the airlines if the price of oil, and hence costs, decrease more rapidly than revenue decreases. With fares as cheap as they are, maybe you'll have 20 people not be able to travel. 20 people who aren't paying that much in the first place, thereby freeing up 20 seats for us non-revs.
You heard it here first: Recession=healthier airlines and easier non-revving.

OPEC is talking about reducing production - they wouldn't be discussing reducing production unless they're seeing a drop in demand. Oil prices are extremely sensitive to demand, so it's very likely that fuel costs will be down substantially.
I just don't have as much faith in airfares holding steady as you. But we'll likely start seeing planes a bit less packed.

 

[av8instyle]

OPEC is talking about reducing production - they wouldn't be discussing reducing production unless they're seeing a drop in demand. Oil prices are extremely sensitive to demand, so it's very likely that fuel costs will be down substantially.
I just don't have as much faith in airfares holding steady as you. But we'll likely start seeing planes a bit less packed.

If you are correct, that would be a pleasant change--the oil and load (sts) parts.

 

[HighSpeedClimb]

Why is it always "I have a friend"

 

[Old School 737]

OPEC said it might cut production and look what happened to oil prices today! Closed over $100. I don't see oil prices comming down any time soon, it seems OPEC likes the price just about where it is at!

OPEC is talking about reducing production - they wouldn't be discussing reducing production unless they're seeing a drop in demand. Oil prices are extremely sensitive to demand, so it's very likely that fuel costs will be down substantially.
I just don't have as much faith in airfares holding steady as you. But we'll likely start seeing planes a bit less packed.

 

[QCappy]

Who cares about $100 oil. I'm still recovering from Ferlo's comments.:nuts:

 

[Andy]

OPEC said it might cut production and look what happened to oil prices today! Closed over $100. I don't see oil prices comming down any time soon, it seems OPEC likes the price just about where it is at!

If you're looking for an instant downward movement in the price of oil, you will be disappointed. It doesn't work that way.

You must've missed the news on the refinery fire. The rise was due in part because of the refinery fire and also due to the talk of cuts.

You might also want to watch CNBC or Bloomberg when they're focusing on the commodity pits. The fundamentals don't necessarily dictate short term pricing. You'll find similar runups in other commodities; probably in no small part due to the shifting of assets away from equities and bonds by some of the hedge funds out there. It's an interesting 'safe haven' play. There's a much more bullish case for the current pricing in grains than there is in petroleum.

 

[120% Torque]

OPEC is talking about reducing production - they wouldn't be discussing reducing production unless they're seeing a drop in demand. Oil prices are extremely sensitive to demand, so it's very likely that fuel costs will be down substantially.
I just don't have as much faith in airfares holding steady as you. But we'll likely start seeing planes a bit less packed.

Just heard on the radio, business analyst saying gasoline could hit $4/gallon by July of this year.

 

[ONTFO]

I am posting this for a friend who is currently flying for Alaska (2 years seniority), lives in Denver, and is trying to decide whether or not to make the jump to UAL. Pay seems comparable between the two, but the concerns are possible mergers/acquisitions and the long-term viability of the two carriers.

Thoughts?

Thanks!

Obviously was hired after 5/1/05 , it would be a no brainer otherwise.

Good luck with the job hunt, just waiting my turn. As soon as I jump, they'll move up 1 number.

ONTFO

 

[Andy]

Just heard on the radio, business analyst saying gasoline could hit $4/gallon by July of this year.

Unless the analyst is predicting record crack spreads, that's not a realistic estimate. I haven't read any damage estimates yet, but I find it unlikely that the Big Spring refinery is going to take a long time to return online. I don't see crack spreads widening to a post-Katrina scenario, especially with declining demand.

A larger problem is credit. Credit is the fuel of western economies. Credit markets are locking up like I've never seen before; risk premiums are rising at an incredible pace. We are on the brink of a lifetime event.
Here are a few links from the past day:
http://www.reuters.com/article/companyNewsAndPR/idUSN1959403020080219
http://www.reuters.com/article/marketsNews/idCAT15640320080220?rpc=44
http://www.nbc11.com/news/15345539/detail.html
http://www.bloomberg.com/apps/news?pid=20601009&sid=alg9g8vGRoV4&refer=bond

Very soon, even the most creditworthy individuals, corporations, and governments will have trouble obtaining credit at less than double digit rates. I have never seen the repricing of risk move at this rapid of a pace IN SPITE of the Fed continually cutting interest rates. This is resulting in decreased worldwide demand for all goods and services.

As for oil, oil is just starting to experience decreased demand. With the way that this is picking up steam, I'd say that it's getting close to time to buy DUG. I was going to wait until after Memorial Day to open a position, but I may have to move up my timetable. DUG is not a widow's and orphans play.

 

[dashtrash]

Wait just a little (on DUG) and don't think outloud so much! I thought klako was self-centered.

Unless the analyst is predicting record crack spreads, that's not a realistic estimate. I haven't read any damage estimates yet, but I find it unlikely that the Big Spring refinery is going to take a long time to return online. I don't see crack spreads widening to a post-Katrina scenario, especially with declining demand.

A larger problem is credit. Credit is the fuel of western economies. Credit markets are locking up like I've never seen before; risk premiums are rising at an incredible pace. We are on the brink of a lifetime event.
Here are a few links from the past day:
http://www.reuters.com/article/companyNewsAndPR/idUSN1959403020080219
http://www.reuters.com/article/marketsNews/idCAT15640320080220?rpc=44
http://www.nbc11.com/news/15345539/detail.html
http://www.bloomberg.com/apps/news?pid=20601009&sid=alg9g8vGRoV4&refer=bond

Very soon, even the most creditworthy individuals, corporations, and governments will have trouble obtaining credit at less than double digit rates. I have never seen the repricing of risk move at this rapid of a pace IN SPITE of the Fed continually cutting interest rates. This is resulting in decreased worldwide demand for all goods and services.

As for oil, oil is just starting to experience decreased demand. With the way that this is picking up steam, I'd say that it's getting close to time to buy DUG. I was going to wait until after Memorial Day to open a position, but I may have to move up my timetable. DUG is not a widow's and orphans play.

​

 

[120% Torque]

Obviously was hired after 5/1/05 , it would be a no brainer otherwise.

Good luck with the job hunt, just waiting my turn. As soon as I jump, they'll move up 1 number.

ONTFO

ONTFO, where would you leave for?

 

[Andy]

OPEC said it might cut production and look what happened to oil prices today! Closed over $100. I don't see oil prices comming down any time soon, it seems OPEC likes the price just about where it is at!

OldSchool et al, not trying to beat a dead horse, but crude inventories for last week were just released. The forecast was for a build of 2.3 million barrels (there's a buildup in inventory in the springtime). It ended up with a build of 4.2 million barrels. Supply is outstripping forecast demand.
You should see oil coming down soon. And here's a link to an article where T Boone Pickens predicts the same: http://www.cnbc.com/id/23272368
I was unaware of Pickens' position on oil prices, but he's not one I'd bet against.

 

[Hamburger]

I'd stay at Alaska...and from me, that's really saying something.

You sir, are hope for the future. The most bitter and disgruntled employee on the board, but you still realize that there is hope where you are to stick it out and fight. You realize that FedEx isn't hiring and we're all in the same boat. Binding arbitration (administered by a guy personally appointed by our President) kicked your ass once, but won't happen again. Bill Kennedy is dead, but Alaska still has a lot going for it.

 

[AKMD80GUY]

Ferlo says what all of us think. The pay and constant contract abuses are just the start of the contempt that we all feel for this companys management. It's a good thing that the rest of the industry sucks right now because alot of us would have left already.

I also remember hearing that the magic number stock price for a buy out was $18.00. Maybe that is why we had another $50 mil stock buyback.