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Oil prices tumble, here comes the profit sharing...

General Lee

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From a Reuters article on CNBC dot com, an excerpt from the article:

US, Brent crude tumbles as OPEC takes laissez-faire approach
Reuters



"KUNA quoted Omair as saying $76-77 a barrel might be the level that would end the oil price slide, since that was the cost of oil production in the United States and Russia.

Top oil exporter Saudi Arabia is also quietly telling oil market participants that Riyadh is comfortable with markedly lower oil prices for an extended period, a sharp shift in policy that may be aimed at slowing the expansion of rival producers including those in the U.S. shale patch.

In private meetings with oil market investors and analysts Saudi official have telegraphed that the kingdom, OPEC's largest producer, is ready to accept oil prices below $90 per barrel, and perhaps down to $80, for as long as a year or two, according to people who have been briefed on the recent conversations."




Wow, that will really add to profits at all airlines, and the resulting profit sharing for those airlines that have it. Oil this low probably could have sustained 50 seat RJs and their lower range of profitability. (How ironic) Instead, 200 plus will be parked at one legacy, regardless. At least there will be mainline expansion and hiring.



Bye Bye---General Lee
 
Last edited:

gutshotdraw

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Here comes Ebola paranoia.

Methinks if it gets much worse (whether perception OR reality), the last place people will want to be is on a jet with 150-200 coughing, sneezing strangers.

Might dent that profit sharing check a bit. Jussssss sayin.
 

General Lee

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Here comes Ebola paranoia.

Methinks if it gets much worse (whether perception OR reality), the last place people will want to be is on a jet with 150-200 coughing, sneezing strangers.

Might dent that profit sharing check a bit. Jussssss sayin.

Uhhhh, not so far, three of the four quarters are done, and the profit sharing amounts have already been placed in a profit sharing fund. The second quarter profit of $1.4 billion was already the highest one quarter profit in history, and the third will probably be higher. Even if you stopped after the third quarter, the profit sharing will likely be twice what was given last year. (A check on Feb 14 of this year). Throw in tumbling oil for the last quarter, and I don't think you are correct. Just sayin... We shall see.



Bye Bye---General Lee
 

DieselDragRacer

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If this Ebola thing gets bigger, it will be great for the 91/135 jet jockeys. You can't be putting those 6 and 7 figure guys and gals on a filthy 30 year old MD88 infested with common people cooties. :erm:
 

SpauldingSmails

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Hey now, those are 26 year old MD-88s you're talking crap about. Get it right! :)
 

Old School 737

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I believe the price of fuel isn't in our profit sharing calculations ???.. Which is a good thing .. It's based on other stats .. So we're not screwed by the swings of oil. Correct me if I wrong..
 

General Lee

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I believe the price of fuel isn't in our profit sharing calculations ???.. Which is a good thing .. It's based on other stats .. So we're not screwed by the swings of oil. Correct me if I wrong..

It's based off of profits. Lower oil helps with that. I think you were thinking of the "no furlough clause" which counted high oil prices as one thing they couldn't furlough for.


Bye Bye---General Lee
 

SpauldingSmails

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I believe the price of fuel isn't in our profit sharing calculations ???.. Which is a good thing .. It's based on other stats .. So we're not screwed by the swings of oil. Correct me if I wrong..

I think you've got two programs mixed up together. Profit sharing is a percentage of the profit - based on the amount of the profit the percentage is variable. Larger profit, larger percentage.

There's also a performance incentive program that pays out fixed amounts, I believe quarterly, for meeting certain performance metrics. On time, etc...
 

Old School 737

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Just looked and cost (non-fuel are part of the calculations ) for our PBP that's what I was think of .... (
Alaska airlines )profits are of course the largest piece of the pie ...
 

redflyer65

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The low cost of oil will most likely be offset with the cost of Ebola. I hate to say it and obviously hope it doesn't come to fruition.
 

lowtimedriver

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The thread should be titled: "oil prices tumble, here comes the layoffs".
 

General Lee

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The low cost of oil will most likely be offset with the cost of Ebola. I hate to say it and obviously hope it doesn't come to fruition.

Looks like Cleveland may be just as bad Lagos if this isn't contained. What the heck is going on with that hospital in Dallas? Talk about Ridiculous.



Bye Bye---General Lee
 

redflyer65

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Looks like Cleveland may be just as bad Lagos if this isn't contained. What the heck is going on with that hospital in Dallas? Talk about Ridiculous.



Bye Bye---General Lee

They weren't ready in any shape or form. Just like most of the local hospitals in this country. We should have shut down the West African passport holders (or US passport holders that have been there) 3 friggin' months ago.

For all of our sakes.
 

General Lee

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They weren't ready in any shape or form. Just like most of the local hospitals in this country. We should have shut down the West African passport holders (or US passport holders that have been there) 3 friggin' months ago.

For all of our sakes.

I agree.


Bye Bye---General Lee
 

AKMD80GUY

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Hasn't helped my commute to DFW. Been full the last few weeks.
 

jonjuan

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It's based off of profits. Lower oil helps with that. I think you were thinking of the "no furlough clause" which counted high oil prices as one thing they couldn't furlough for.


Bye Bye---General Lee

Whoops. Lee is wrong once again. Like candy from a SKY dispatcher.

"But fuel, the airline's biggest single expense, jumped 29 percent to $2.95 billion. Delta recorded $347 million in charges for adjustments to fuel-hedging ? those are contracts to protect against big spikes in fuel prices, but they can backfire if oil prices fall."
 
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