Good News

[USA320Pilot]

At 2:15 p.m., NYMEX Crude Oil Futures for the December contract were trading down $1.84 cents per barrel to trade at a 7-week low of $47.25. This is about $9.50 below its recent high and $3.25 above US Airways’ business plan target fuel price of $44 per barrel presented to the bankruptcy court during the S.1113(e) hearings.

The commodity has broken below its 50-day moving average, which from a technical analysis perspective is bearish. This is obviously good news for those parties interested in the success of US Airways.

Regards,

USA320Pilot

 

[justaumechanic]

Ok you lost me..

When was crude above 56 a barrel?

Your statement of 47.50 was 9.50 below the all time high..

Did I miss this in the news?

 

[BoeingBoy]

I see that heating oil futures for December delivery closed down, but still over $1.36 a gallon. I think heating oil futures are often used to hedge fuel costs, since heating oil provides a more liquid market and is similiar to jet fuel as a refined product.

Jim

 

[whlinder]

While fuel prices going down is certainly good news for US Airways, its still not the real problem with the carrier or any other U.S. carrier that is losing $$$. In real terms fuel was this high, even higher back in the early 80s. The problem is that passenger yield, in real terms, has fallen pretty much every year for 20 years straight.

 

[BoeingBoy]

I see that heating oil futures for December delivery closed down, but still over $1.36 a gallon. I think heating oil futures are often used to hedge fuel costs, since heating oil provides a more liquid market and is similiar to jet fuel as a refined product.

Jim

[post="199291"][/post]​

And I should have said that the closing price is good news. Here's the chart for heating oil futures for the past year...

Jim

 

[Fatherknowsbest]

Captain, beat you on this story yesterday - sorry you are late. But don't worry. The Company still doesn't know what to do. They will forget to hedge AGAIN!

The more the names change, the more they do the same dumb things over and over!

Regards,

 

[Rico]

Forget to hedge...?

Oh, it is all about remembering to just "hedge", ok, cool.

I thought it had something to do with having enough liquidity to purchase futures contracts, something that requires a large amount of avail Cash...

But If you say all the company has to do, is just not "forget" this time we should be able to hedge all the fuel we want, despite our precarious Financial situation.

Thanks for the heads up on how things work... 🙄

 

[insp89]

While fuel prices going down is certainly good news for US Airways, its still not the real problem with the carrier or any other U.S. carrier that is losing $$$. In real terms fuel was this high, even higher back in the early 80s. The problem is that passenger yield, in real terms, has fallen pretty much every year for 20 years straight.

[post="199296"][/post]​

What ? The only reason Southwest is making any money now is because they have the $$$ and common sense management to hedge fuel.

 

[PHL]

What ? The only reason Southwest is making any money now is because they have the $$$ and common sense management to hedge fuel.

[post="199397"][/post]​

Well, they have had that for certain. And, a veteran management team that's been with them since day one. Oh, and lest we forget, historically, they've had much more efficient utilization of their labor.

 

[insp89]

Well, they have had that for certain. And, a veteran management team that's been with them since day one. Oh, and lest we forget, historically, they've had much more efficient utilization of their labor.

[post="199410"][/post]​

Looks like Southwest's advantage of "much more efficent utilization of their labor" could be coming to an end..if Usairways survives..I've read somewhere that Southwest is beginning to bring more of their aircraft maintence inhouse.

 

[USA320Pilot]

Neil Cohen made a smart move to hedge. In regard to hedging now, that could prove to be a mistake to lock in today's prices. In addition, the company would have to pay the futures contract premium, which would be a cash flow hit.

Regards,

USA320Pilot

 

[insp89]

Neil Cohen made a smart move to hedge. In regard to hedging now, that could prove to be a mistake to lock in today's prices. In addition, the company would have to pay the futures contract premium, which would be a cash flow hit.

Regards,

USA320pilot

[post="199420"][/post]​

No doubt that hedging is a gamble, in the past it paid off big time for Southwest......... In the future, [whether Usairways makes it or not], it looks like Southwest will be in for some Tougher competiton due to the fact every airline out there are asking [and getting ] huge concessions.

 

[whlinder]

What ? The only reason Southwest is making any money now is because they have the $$$ and common sense management to hedge fuel.

[post="199397"][/post]​

That is part of the reason. The other reason is that they have low costs in this low fare environment. Interestingly, WN has been looking into more growth than they originally planned for 2005, and all the new growth would require more fuel purchases at market rates. So they must think they can make money with their new growth at market fuel rates.

Tell me how major international carriers (AF/KL/QF/NZ/SQ/NH/BA) can make money this year with the same fuel prices that the U.S. carriers are paying, while the major U.S. carriers are losing billions.

 

[767jetz]

Tell me how major international carriers (AF/KL/QF/NZ/SQ/NH/BA) can make money this year with the same fuel prices that the U.S. carriers are paying, while the major U.S. carriers are losing billions.

[post="199517"][/post]​

2 words:

Government Subsidizing

 

[justaumechanic]

USA320 - US Airways Hedging fuel?

No way..

Why? Why you say?

You can not hedge fuel while in Bankruptcy..

Second - In order to hedge fuel you have to have money. Clean clear money.. Not money owned by creditors.. US Airways has NO money.. They can not hedge fuel.

So Neil Cohen can sit in his office all day long and watch fuel go up and down and he is powerless to do anything about it. US Airways must buy their fuel at Pump Prices.. Sorry Charlie but thats the way it is..