i love reading the BS Stories of how the Airline industry is struggling

[EasyMoney]

O.K. I don't know anything about the airline industry but let me play devils advocate here. a 737 burns 800 gallons of fuel an hour and that same plane holds roughly 170 or so passangers. Allright so jet fuel currently cost about $6.20 a gallon so on a 3 hour flight a 737 would use about $14880 of fuel.

Now say there is 170 passangers on that plane and they paid say $300 each for a ticket. Thats $51,000 in ticket sales. Obviously the airline has more overhead than just the fuel but from what I can see they have about $36,000 to play with after the fuel is paid for. Where does all that money go? How can they not be making a profit?

 

[Brock Landers]

Again with this rubbish!!! Do yourself a favor and go back to high school learn how to read then you can educate yourself on Futures.

Some one please tell this bozo that Futures contracts do not live to eternity.

There is typically a time when the contracts will expire and the. Airlines that were already deep in the red and taking goverment handouts could not afford multiple long term futures contracts that would still be open today.

So guy shut the hell up , go learn something about futures then come back and apologize for making every one who read this nonsense dumber by sunset today.

hey, fuckstik

i have a DEGREE in Economics and worked as a broker. EVERY single airline is well hedged when it comes to fuel costs. So take your bullshit elsewhere.

 

[GreenDoberman]

I used to have stock in Southwest Airlines a few years ago and closely studied the industry and fuel costs.

A couple of salient points:

1) Southwest and JetBlue are by far the two best run airlines in this country.

2) Airlines often sell prices below costs in far wars with other companies to capture market share.

3) The industry is not nearly as profitable as others.

4) The majority of customers have little to no loyalty to an airline and simply price shop for the best far. This results in the inability to charge what is a fairer price for services rendered.

5) If the government didn't bail out airlines, there would be either A) no airlines left, or B) a monopoly or oligopoly that would result in astronomical prices.

6) Fuel future hedges do not extend into perpetuity as some seem to think and extended raised prices for periods of more than a few years will result in tripling of airfares at the least.

7) Don't buy airline stocks if you want to make money.

 

[Mr.Smith]

Ive read Southwest is the only airline that is hedged on fuel. The others dont have the money. To hedge oil, you have to lay out the cash in advance

 

[theDude24]

brock is generalizing where it is incorrect.

as someone close to many higher ups in an airline, they are very much affected by fuel prices, etc.. and mergers, layoffs, everything is being talked of

thats great SW locked in, but dont say "Airlines" b/c it is definitely not the majority

 

[Objection]

O.K. I don't know anything about the airline industry but let me play devils advocate here. a 737 burns 800 gallons of fuel an hour and that same plane holds roughly 170 or so passangers. Allright so jet fuel currently cost about $6.20 a gallon so on a 3 hour flight a 737 would use about $14880 of fuel.

Now say there is 170 passangers on that plane and they paid say $300 each for a ticket. Thats $51,000 in ticket sales. Obviously the airline has more overhead than just the fuel but from what I can see they have about $36,000 to play with after the fuel is paid for. Where does all that money go? How can they not be making a profit?

a 737-300 holds about 125-135 depending on configuration
the example you gave would be the entire passenger load paying $600/rt
it would probably be close to 275-300 round trip and maybe less
so for example as a rough estimate 130 passengers x $140 each way= $18,200 each way

 

[bookie]

In a press conference, CEO Michael O'Leary discussed Ryanair's new transcontinental service, which will offer extremely cheap economy fares, as well as luxurious business class seats that include amenities like "white seats," beds, and oral sex.:lol:

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[fhmesq44]

I was in europe a couple months back and had to book flights from Valencia to Paris. The cost of the actual flight on Ryanair (exclusive of fees and taxes) was .01 euro. Seriously, if I remember correctly the total cost would have been about 20 euro each, which included some fees, taxes and a charge to check bags. However, they only flew into secondary airports so we didn't fly them (wasn't even Orly, something even farther outside of Paris), instead took Vueling (also very cheap), which was $96 for two people, one way, which included 20e fee for two checked bags and a 4e fee for using a credit card. There are a ton of low cost privately owned airlines in Europe, not sure why none can swing it here.

 

[TTinCO]

Frontier just announced that they are going to cut 17% of their routes and there is speculation that 1,000 people will be laid off.

If you can't see that the airline industry is in a world of shit, I don't know what to tell you.

 

[Buster]

Frontier just announced that they are going to cut 17% of their routes and there is speculation that 1,000 people will be laid off.

If you can't see that the airline industry is in a world of shit, I don't know what to tell you.

they didn't lose but 60 million last year...

http://www.denverpost.com/business/ci_9695060

 

[jambolaya1]

i still cant get over the absurdity of this post!!! Can you say moonbat!!!

Buddy, tell us some more about oil futures!!!
%^_%^_%^_%^_%^_%^_%^_


TRAVEL NEWS
American Airlines to cut 6,840 jobs


By Peter Pae, Los Angeles Times Staff Writer
10:20 AM PDT, July 03, 2008
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<?XML:NAMESPACE PREFIX = RUNTIME /><RUNTIME:TOPIC id=PLENT000002>American Airlines</RUNTIME:TOPIC>, the largest carrier in the world and the busiest at <RUNTIME:TOPIC id=PLGEO100100102380000>Los Angeles</RUNTIME:TOPIC> International Airport, said Wednesday that it expected to slash nearly 7,000 workers, or about 8% of its workforce, as it grounds planes and flights to cope with rising fuel costs.
The cuts, expected by the end of the year, are the largest among the major airlines and come as fuel costs, now reaching nearly half of total expenses, are threatening the financial viability of even the largest airlines.
In a filing with the Securities and Exchange Commission, American's parent company, <RUNTIME:TOPIC id=ORCRP000932>AMR Corp.</RUNTIME:TOPIC> of Fort Worth, <RUNTIME:TOPIC id=PLGEO100104600000000>Texas</RUNTIME:TOPIC>, also said that it would write off nearly $1.2 billion on its books to reflect the reduced value of its older, fuel-guzzling aircraft that the airline plans to stop flying.
Grounding the planes would significantly reduce the value of the mostly <RUNTIME:TOPIC id=PLGEO100100600000000>MD</RUNTIME:TOPIC>-80 and RJ-135 aircraft, according to Wednesday's filing.
The cutting of 6,840 workers would be in line with American's plans to shed about 8% of its flights by year's end and would entail the airline's taking a $70-million charge against second-quarter earnings for expenses related to the workforce reductions, the carrier said in a memo to employees. The airline has a worldwide workforce of about 85,500.
"While we are still working through the specific impact to employee work groups, both voluntary and involuntary employee reductions commensurate with the overall system capacity reductions are expected companywide as we reduce the size of the airline," Jeff Brundage, the airline's head of human resources, said in the employee memo.
Rising oil prices have hit airlines particularly hard, but the industry has had difficulty raising fares to keep up with escalating fuel expenses that have climbed by about 70% since last year. Airfares are up an average of about 20%, and as a result, airlines have been cutting back flights and adding fees for services that in the past were included in a fare. Last month, for instance, American instituted a $15 fee for the first piece of checked baggage.
If oil prices were to stay at current levels -- they have hovered at about $140 a barrel this week -- U.S. carriers could post record losses of more than $13 billion this year, more than the fallout from the Sept. 11, 2001, terrorist attacks, according to the Air Transport Assn.
In all, major airlines have announced the grounding of nearly 500 planes and the cutting of nearly 20,000 jobs since May. In addition to American, <RUNTIME:TOPIC id=ORCRP015778>UAL Corp.</RUNTIME:TOPIC> has said its <RUNTIME:TOPIC id=ORCRP017350>United Airlines</RUNTIME:TOPIC> would eliminate 1,100 jobs, while <RUNTIME:TOPIC id=ORCRP003883>Continental Airlines Inc.</RUNTIME:TOPIC> said this week it might cut as many as 3,000 workers from its payroll.
"Everybody is going to be taking these charges to adjust the accounting," said Ray Neidl, an analyst with Calyon Securities. "It's going to be big."
peter.pae@latimes.com
Bloomberg News was used in compiling this report.

 

[tkf18ny]

thank god my brother works for continental