Spirit and fuel hedging

[Mike man]

Beetle007 the bag math was in response to...

Seriously, do ya'll think they are that dumb not to raise ticket prices if we are losing money. Multiply the bag count times 20 bucks a bag. Most legs the bags just about cover the fuel burn. Hope some of ya'll don't get drug tested, not sure it will go well. Your on crack if you think they are not making money. Don't be surprised if all of a sudden were taking delieveries of 15+ plans next yr.

posted by critterair2

 

[Beetle007]

Sorry Mike. I now understand your point.

 

[critterair2]

Mike, I do agree with the numbers that you posted. However, I don't agree with the fuel price. How much we are hedged at what price, none of us really know. I think we can all agree that with the amount of facts that we have been presented from the higher ups, the fuel prices in the paperwork are prob. not what we are paying. I THINK, everyone see that, MY OPINION, we are paying a fair amount lower /gallon. I've been wrong many times in my life, very well could be now. The main point of my last post is I cannot believe if we were blowing through the last dollars that NK has, then mgmt would keep up with the 9 dollar fares. There is alot that we complain about towards mgmt but, they are business people, THEY ARE SMARTER THAN THAT.
JBLOW, dude don't get pissed at us for smokin you guys out of FLL, don't be surprised if we end up on the same seniority list at some point. Who's buying who, we'll see......lots of $$ in TPG. Although business models don't make sense, routes do. Folks this is the time for all pilots on all list to stick together and look out for each other. ITS JUST A JOB, but it does pay the bills. When its all over its what is at home that counts.

 

[Mike man]

Even at half price...1.79 a gallon that is still 160 bags checked at $20 just to cover the fuel.
1.79 x 1791 = 3205 / 20 = 160

It is hard to imagine that Spirit would be immune to the problems of the market today. Like I have said before, if you treat people badly enough for long enough they will stop flying Spirit and buy tickets on other airlines.

 

[Wino]

and 50 percent off fuel would be making the assumption that your hedging is better than southwests!


Usually, really cheap fares like the 9 dollar one are not signs of good managment, but extreme desperation.

Remember, the closer and closer Northwest got to bankruptcy, a few years back, the LESS likely they were to go along with fare increases. When you get real desperate you will take any cash for a seat that you have already committed to fly that is still empty. I would look at the 9 dollar fare as real frightening, not a sign of good management.

Fare increases are going through right now because none of the majors are actually on the brink and have enough cash to ride out short term effects of a fare increase (short term drop in loads for a longer time rise in yield) Fare sales scream "We need cash now!"


Stay away from the coolaide criterair, it rots your brain.

Cheers
Wino

 

[Mike man]

I would look at the 9 dollar fare as real frightening, not a sign of good management.

50% is way too far fetched...and I'll agree with you on poor management. Critter may have been drinking the kool-aid for sure.

 

[EMB170Pilot]

How many RAH pilots are getting furloghed?

 

[Beetle007]

. I think we can all agree that with the amount of facts that we have been presented from the higher ups, the fuel prices in the paperwork are prob. not what we are paying.

Fuel hedging doesn't mean you pay less for fuel.

Southwest invests in heating oil. When the price of heating oil goes up they sell their investment in heating oil (just like stock). They never actually see the oil. They just buy and sell contracts for oil.

When southwest goes to the pump they pay the same as everyone else.

Here is a good research paper on fuel hedging:
http://www.kellogg.northwestern.edu/research/fimrc/papers/jet_fuel.pdf

 

[hockeypilot44]

How many RAH pilots are getting furloghed?

How many RAH pilots were fired in training?

 

[critterair2]

Haven't drank the coolaid, keeping plan B well alive, just a hunch that we are better off then they want us to believe. When was the last time we were told the truth and they were'nt playing childhood games with us.

 

[RemoveB4Flght]

Usually, really cheap fares like the 9 dollar one are not signs of good managment, but extreme desperation.

I would look at the 9 dollar fare as real frightening, not a sign of good management.

Cheers
Wino

it's not like we have a plane with 144 people paying 9 bucks a piece..

the $9 fares and multitude of other bizzare internet sales are a marketing gimmick that bodes people into navigating our confusing website in the hopes of matching up their travel plans with the particular dates and flights which there are the $9 seats

it's a lot like vegas where people keep coming back, even after getting screwed, hoping that this time they will come out ahead....

meanwhile the same bag and drink fees that were to have sent our bus station pax scrambling a year ago are now being mirrored by the legacies..

strange times we find ourselves in

 

[:-)]

Second, marketing strategies such as idiotic 9 dollar fares are costing 242 possible furloughs.

Pilots are idiots. (yes that includes me)

Marketing strategies are intended to put buts in seats at a profit. $9 fares fill seats that would otherwise remain unsold. Look at it this way, a seat sold for $9 is $9 more than you would make if you closed the door with the seat empty.

AA started "yield management" and they also have fare sales. NK uses the same strategy. So does WN. It's called chasing dollars in a down market and I for one and glad that BB found a way to get $9 more than the next guy.

You should also be happy. Jake Shore would have closed the doors long ago; BB and BB and their screwy marketing have provided the paychecks.

If you haven't noticed, the entire nation is hurting, so why do think that the airlines would be any different.

Maybe you should be supporting the "drill here, drill now" campaign instead of spouting off on the internet.

 

[Wino]

Dont be so sure that the 9 dollars was a net gain. Remember its weight and you got to buy fuel to haul the weight.

Using the old 10 percent rule for tankering fuel (it costs 10 percent of the fuel to carry it) a 200 lb passenger will increase your fuel burn by 20 lbs. call it 4 dollars a gallon for jet fuel at 7 lbs per gallon and it costs 12 dollars in gas to haul that 9 dollar pax.

But I guess they will make it up in volume!

Pull up a flight plan and plug in heavier weights and see what it does to your burn...

Cheers
Wino

 

[kwick]

It probably wasn't a net gain in that context. The $9 fare is a marketing tool.

Rather than spending thousands of dollars on billboards or newspaper ads, the $9 fare draws attention to Spirits service in a particular market.

 

[Mike man]

The kool-aid was being served yesterday in FLL, Paul O was serving and loads of folks were slamming it.