How is the Lumexis trial going?

[BoeingBoy]

Don't mind sharktooth, Piney - he has no idea what US was paying for fuel when oil hit $147 either. What he probably doesn't realize is that US doesn't report what they pay for fuel daily - no airline does.

For the 3rd quarter 2008 US actually paid $1.11 Billion for fuel vs $692 million for the same quarter in 2007.

Jim

 

[sharktooth]

Don't mind sharktooth, Piney - he has no idea what US was paying for fuel when oil hit $147 either. What he probably doesn't realize is that US doesn't report what they pay for fuel daily - no airline does.

For the 3rd quarter 2008 US actually paid $1.11 Billion for fuel vs $692 million for the same quarter in 2007.

Jim

So, less than twice what they paid. Big deal. How does that equate to the futures ratio, sir? Educamate us, sir!

My point is that there is little correlation between short term changes in "futures" vs actual, especially with jet fuel. Tossing out a nearly always bogus number to scare someone is hardly considered "logical thinking".

 

[BoeingBoy]

So, less than twice what they paid. Big deal. How does that equate to the futures ratio, sir? Educamate us, sir!

I thought I'd get that question, which further illustrates your lack of understanding...

US' reported 3Q07/08 fuel expense is not based on the highest cost during the quarter nor the lowest cost during the quarter, but rather reflects the average fuel price for the quarter. The actual crude price during 3Q08 varied from a high of $145.31/bbl to a low of $91.49/bbl and the average was $120.17/bbl. For 3Q07 the average crude price varied from a high of $83.85/bbl to a low of $69.30/bbl and the average for the quarter was $76.34/bbl.

I think that if you look at the averages you'll get much better correlation between the change in actual fuel expense and average crude price for the two quarters.

My point is that there is little correlation between short term changes in "futures" vs actual, especially with jet fuel.

There isn't a commodity (other than jet fuel itself) that has 100% correlation to jet fuel price fluctuations, but "little correlation" is vastly overstating the relationship of crude prices to jet fuel prices. Just like the prices at the corner gas station, which went up as NYMEX crude futures went up and came down as NYMEX crude futures came down, the price fluctuations of jet fuel closely (but not exactly) follow the fluctuations of crude futures.

Jim