Fuel prices way high!

[dariencc]

<<<The study showed that the 767 fleet burned 24 percent less fuel than the A-330s and would save approximately $14.6 billion in fuel costs. That number is significant since the Air Force spent approximately $6.6 billion on aviation fuel costs in 2006.>>>


Of course the 767-200 burns less than the A330-200. It is a much smaller aircraft. You would find that an Embraer 145 also burns less than the A330-200.


This does not translate into a more efficient aircraft, oh Great One.

 

[700UW]

Why dont you e-mail Boeing instead stalking my posts?

 

[BoeingBoy]

You're both right ...... and wrong. Fuel efficiency is measured in two ways - how much is burned getting from A to B (effectively like your car) and how much is burned getting each seat from A to B (fuel cost per ASM).

If the first was all that mattered, the airlines would be flying nothing but Cessna 152's. If the second was all that mattered, the airlines would be flying nothing but B747's/A380's. Obviously, neither measure by itself determines what airplane is the most fuel efficient on a given route.

It's the balance of the two efficiency measures plus market demands (traffic, distance, fleet limitations, etc) that determine which is most efficient to operate on a given route. Flying a 767 because it burns less fuel on a route isn't efficient if you could sell 75 more seats each flight - you either leave more revenue behind than you save in fuel or you add a second flight and end up burning more fuel than a single bigger airplane would burn. Likewise, flying an A330 on a route because of it's lower burn per ASM isn't efficient if you can only sell half the seats - you burn extra fuel for no reason whatever.

Jim

 

[john john]

Now Jim don't confuse them with facts or their heads will explode.

Don't you find it interesting that now that fuel is going to be the biggest single cost going forward that 50 Seat RJ's have lost their luster? The 50 Seat RJ was designed specifically to be a scope buster and allow for lower labor rates.

What the heck PineyBob you are not an employee. Your not suppose to comprehend or experience and recognize the facts

 

[BoeingBoy]

The 50 Seat RJ was designed specifically to be a scope buster

I'm not sure I'd go quite that far - at least at the time. Originally, the CRJ-100 was a turboprop replacement when fuel was cheap - passengers wanted "quiet, fast jets" instead of those "noisy, slow prop planes" and generally mainline pilots didn't care about flying those "little jets" any more than they cared about flying the turboprops they replaced. Besides, the CRJ (the first RJ) arrived about the time that the 90's boom was getting cranked up, so there was plenty of growth for everybody.

By the time the 90's were going into the history books, it was a different story - especially after 9-11. The RJ at mainline horse had long since fled the barn - owned/affiliated carriers operating RJ's were a fixture at every legacy carrier. Management wanted bigger RJ's for the much the same reasons - better economics if the market couldn't support a mainline plane and it was hard to find a mainline plane with less than 100+ seats at the legacies. This is when the power struggle over RJ's turned earnest and the scope fights really began at the legacies.

Jim

 

[WCT]

Back to the topic on hand. Jim how is US going to be able to survive this big surge in fuel prices?? Have we been able to hedge enough for the this year? :huh:

 

[john john]

better economics
Jim

Bottom line Employee cost and frequency

 

[BoeingBoy]

Jim how is US going to be able to survive this big surge in fuel prices?? Have we been able to hedge enough for the this year? :huh:

Don't know what's happened with hedge positions since the end of 2007, but at that time US had 50% hedged for the 1st quarter, 36% for the 2nd, 23% for the 3rd, and 10% for the 4th, for an average of 30% of 2008 needs. The hedges equal jet fuel equivalent prices for the percentage hedged from a low of $2.08 - $2.28 a gallon for the 1st quarter to a high of $2.46 - $2.66 per gallon for the 4th quarter.

As for how US (or most carriers) can survive current fuel prices if they continue, there's only two alternatives - increase revenue/cut costs to offset higher fuel prices or burn cash hoping to weather the storm (or a combination of both, which I guess makes 3 alternatives).

We've already seen some examples of attempts to increase revenue - $25 charge for 2nd checked bag, $75 "quick ticketing fee" on award tickets are examples, as is the $5 "fuel surcharge" that only applies to tickets purchased thru the website. Cutting costs - look no further than dropping glassware. I even wonder if the new uniform delay is tied up in this - the company will be paying for all those uniform pieces that are "slow being delivered".

Worst case - burn cash? US possibly ends the year with about the same amount of unrestricted cash that "old" US had when they filed for BK2.....

Jim

 

[WCT]

Don't know what's happened with hedge positions since the end of 2007, but at that time US had 50% hedged for the 1st quarter, 36% for the 2nd, 23% for the 3rd, and 10% for the 4th, for an average of 30% of 2008 needs. The hedges equal jet fuel equivalent prices for the percentage hedged from a low of $2.08 - $2.28 a gallon for the 1st quarter to a high of $2.46 - $2.66 per gallon for the 4th quarter.

As for how US (or most carriers) can survive current fuel prices if they continue, there's only two alternatives - increase revenue/cut costs to offset higher fuel prices or burn cash hoping to weather the storm (or a combination of both, which I guess makes 3 alternatives).

We've already seen some examples of attempts to increase revenue - $25 charge for 2nd checked bag, $75 "quick ticketing fee" on award tickets are examples, as is the $5 "fuel surcharge" that only applies to tickets purchased thru the website. Cutting costs - look no further than dropping glassware. I even wonder if the new uniform delay is tied up in this - the company will be paying for all those uniform pieces that are "slow being delivered".

Worst case - burn cash? US possibly ends the year with about the same amount of unrestricted cash that "old" US had when they filed for BK2.....

Jim

Jim, do you think US is going into the worst case? OH my!?

 

[BoeingBoy]

Jim, do you think US is going into the worst case? OH my!?

Whatever happens it probably won't just be US, although chasing away high-yield FF's with what I consider bone-headed things like dropping the 500 mile minimum isn't helping.

So much depends on what happens that it's impossible for me of offer any predictions. Fuel prices could continue up or go lower. Traffic could drop or not. The industry could increase fares a lot, a little, or not at all. Will consolidation happen or not. If so, will US be included or not (or does it matter). Etc, etc, etc.

Just hang on, though - it might be a wild ride. I'll freely admit to being glad I'm watching from the outside.

Jim

 

[iwantout]

For all those flight attendants considering coming back, take warning. This fuel thing has the potential of grounding a lot of planes which could lead to a major layoff. Before you make any huge changes in your life to come back to this place, consider what the future most likely will hold.

 

[dariencc]

You're both right ...... and wrong. Fuel efficiency is measured in two ways - how much is burned getting from A to B (effectively like your car) and how much is burned getting each seat from A to B (fuel cost per ASM).

Thanks for the reply, Jim. I still do your old job, so I understand the concept. That's why I never said the 330 was more efficient than the 767-200, only that the lower fuel burn of the much smaller aircraft does not equate to greater efficiency. It is also worth noting that the 76 is much less efficient in the mission it serves at LCC.

Just trying to end yet another misinformed, cut-and-paste thread hijack from our commercial baker turned Google aviation expert.

 

[Piedmont1984]

The east pilots could do a great deal to reduce fuel consumption. They have been asking for wage parity with the west for two years. Management response has been "blow it out your tailpipe". So......thats what they do.

 

[The Bagfather]

Does that really happen? and on any serious scale ?
Does any body have figures on east/west pilots
flying the same routs? Just curious.

 

[wopr21]

All the company will do is ask for more concessions. When we work for free then they will have to manage the airline. Everything that a purchase at the store now has gone up in price. They must pass the cost to the consumer. Flying has to get more expensive. Thats the way it is. The people that can afford it will keep flying, thus reducing capacity, airplanes in the air. Just think less airplanes in the air means everything runs on time, bags make it to there destination, service goes up.

Its amazing to me that when they try to raise fares by 5 dollars, it won't stick because LUV didn't do it.
If the planes are full RAISE THE DAMN FARES!!!!!


aaaahhhhhhh
wopr21