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?