bad news, good news

The fall in fuel prices works in our favor, since we're hedged fairly well for 1Q, but not for 2Q and beyond. But it also works in UAL's favor, since they're not hedged at all.

But don't think that gives us a lot of breathing room. Now that people can change tickets once without a fee, they're bailing out of seats they're holding now, and changing them for later.

When folks bail out at the last moment, we can't re-sell the seats. It's still the right thing to do from a customer service perspective, but there's no doubt we're going to lose money over it.
 

FA Mikey

Veteran
Aug 19, 2002
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miami
goldwatermiller08.com
Bad news is that passenger volume is down. The good news is that the airlines largest daily expense, fuel is dropping like a rock. April oil contracts are down 10 dollars of their February peak of 39 dollars a barrel. May contracts are down to 26 dollars a barrel.

Although in the early stages, the war seems to be going well for the US. AA should see a windfall in May. Employees pay cuts and cheaper fuel. Its two biggest expense''s falling drastically. Hopefully the fall off in travel will rebound quickly. Either way AA is getting a lot of new breathing room.